The ‘Mickey Mouse' master's degrees which could cut your salary
The average salary three years after studying for a master's degree is £32,500, according to data from the Department for Education, 8.7pc higher than if they had gone straight into work after a bachelor's degree and equal to a £2,600 pay bump.
But just as young people doing A-levels need to dodge 'Mickey Mouse' degrees, those eyeing up postgraduate study in some fields should consider whether it is worth the lost years of experience and salary rises in the job (not to mention the extra debt).
In some cases, a master's degree actually reduces your earnings potential by thousands of pounds.
A growing number of young people in the UK are choosing to extend their time at university with a master's, with 110,560 such degrees issued in England in 2022. This is up by more than a third (34.8pc) in four years, according to the Higher Education Statistics Agency.
For many, such a decision is a financially savvy move. The advantages were greatest for those in education and teaching, which led to an average pay increase of £11,400 in the 2021/22 tax year, the latest for which data is available.
This is the difference between those in teaching having completed a bachelor's degree alone – constrained by law to the training or early years sectors, or private schools – and those holding a master's who can teach in primaries and secondaries.
The figures compare the salaries of graduates with just one degree five years after they leave education to those of master's students three years after (and so five years after when they would also have graduated).
Graduates with master's degrees in business and management studies (£9,200), law (£8,400) and computing (£6,900) also boosted their salaries. In each case these gains assume a two-year course.
But others would have been financially better off jumping straight into employment – and that's not even taking into account the extra tuition costs.
Those with a master's in language and area studies earned on average £4,000 less three years later than those who were five years out from a bachelor's in the same subject (£27,400 versus £31,400).
Almost a third of all subjects (10 out of 32) produced a similar predicament, including history and archaeology (£3,300 less), chemistry (£3,300) and English studies (£2,500). A further three subjects did not increase salaries at all.
Higher education qualifications continue to boost job prospects of working-age adults: the employment rate of graduates between 16- and 64 years old was 87.3pc in 2022, considerably higher than the 69.8pc rate for school leavers.
But those extra years of study in a postgraduate course do not lead to higher employment levels: 86.3pc of bachelor's degree holders were found to be in sustained employment five years after graduation, rising just 0.5 points for those with a master's the same year.
And this relative advantage is slipping. The salaries of those with one degree increased by 16.8pc between 2015/16 and 2021/22, or 0.6pc in real terms.
For those who put in an extra two years in the library, the 12.5pc increase translates to a 3.2pc fall when adjusted for inflation.
This is in spite of the fact that those who pursue postgraduate studies tend to be among the highest-achieving graduates.
But all of these figures relate to gross earnings alone. Net of the cost of two extra years at university – with uncapped tuition fees ranging from £5,000 to over £30,000, according to Ucas – the benefits are even harder to tease out.
Figures from the Student Loans Company show postgraduate borrowing to English students peaked at £850m in the 2021/22 tax year – up 58.1pc in four years.
The additional loan balance will also be costlier than one's undergraduate debt. Undergraduate lending falls under Plan 5, with interest charged at the retail price index (RPI), which is 4.3pc for the current academic year.
Postgraduate loans are issued under Plan 3, which adds 3pc to the RPI, making 7.3pc currently.
Over the course of a working life, these factors may well not outweigh the financial gains of a master's degree. But for young people on the lowest rungs of the career ladder, thousands of misspent pounds could prove an irrecoverable blow.
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