While university is typically seen as the path to a well-paid, professional job, a new study from Barclays and the Centre for Economics and Business Research (Cebr) suggests apprentices can earn up to 270% more in certain industries.
Overall, there is just a 1.8% gap between the lifetime earning premium of apprentices and university graduates.
However, in some sectors, apprentices’ LEP outstrips that of graduates by over 200% - in industries such as Arts, Media and Publishing (270%) and Agriculture, Horticulture and Animal Care (211%). In other sectors, there is a significant difference in the LEP for apprentices including Social Sciences (10%) and Languages, Literature and Culture (29%).
The report rebukes a range of common misconceptions about apprenticeships, like only being relevant for those careers in vocational or manual industries. Business, Administration and Law account for more apprenticeship starts (29%) than any other in 2014/15. That was closely followed by Health, Public Services and Care (26%). And there were over 89,000 apprentice starts in Retail and Commercial Enterprise and over 74,000 in Engineering and Technologies.
It also made clear that apprenticeships are a popular and feasible career path regardless of age, with 43% of new starts made by people over the age of 25.
The uptake of apprenticeships has more than doubled in the past decade, with over half a million started in the 2014/15 academic year. And Barclays expects those figures to grow exponentially in the coming years and university applicants face an increasingly uncertain and challenging landscape, with the abolition of maintenance grants and increasing tuition fees.
Mike Thompson, head of apprentices for Barclays, said: “The figures released today shows quantifiably for the first time that apprentices are getting a ‘hidden pay cheque’, through earning while working, that is comparable, or in some cases higher, than university graduates. This bonus means they can fast track themselves to home or car ownership – as well as through their careers without worrying about long-term student debt."
He added: "Today, apprenticeships are available in a huge range of sectors and levels and are open to everyone, regardless of age, social background or qualifications and are fast becoming one of the most worthwhile career paths allowing people to earn and learn at the same time. With increased tuitions fees driving up the cost of university and putting it out of reach to some, we forecast that apprenticeships, particularly Degree Apprenticeships, will become increasingly more important to the UK economy, and predict exponential growth in their uptake in the near future. We have seen enormous productivity and value in bringing apprentices in to our business and strongly encourage others to follow our lead.”
Pushing up pay
Separate figures from apprenticeship provider Positive Outcomes suggested that 92% of employers would be willing to pay their apprentices more than the typical apprenticeship wage, providing they are matched with the right candidate.
Another survey conducted by Positive Outcomes earlier this year found that people are often putting off apprenticeships because the wages are too low.
Ryan Longmate, managing director of Positive Outcomes, said: “The minimum wage for 18-20 year olds per hour in the UK is £5.30. When taken as an annual salary, based on a 37.5 hour week, this equates to around £10,300 per year. Our research suggests then that the vast majority of employers are willing to pay considerably more than that for an apprenticeship qualified employee.”
Last week, the Federation of Small Businesses (FSB) reported that England's smaller firms have the potential the double the number of apprenticeships they hire, if the government gets its support and incentives right.