If you're a graduate, now in middle-age (late 40s+), what has been your average salary growth per year?

[treathugga]

This question came up because we've been playing about with the default assumptions used in the Student Finance calculator on the Money Saving Expert website. They assume average salary growth of 2% a year, so we wanted to see how that compared with our own salary growth.

There are lots of compound interest calculators online, but we used this one (ignoring the fact that its in dollars): www.calculatorsoup.com/calculators/financial/compound-interest-calculator.php.

Both of us graduated and started work in 1993 in London - DH on £11k in the Civil Service and me on £13k at a University. Since then we've both changed jobs a few times and developed careers in analytical areas. We're not super-ambitious types - just slow and steady, easy going, stress-averse. I have had 2 year-long career breaks and worked part time since our first son was born in 2004, and have remained as a senior analyst (still at a university) rather than seeking a higher stress management position, whereas DH is now a director of a small department at a FTSE 100 company. Using the compound interest calculator, we worked out that DH's base salary has increased by an average of 8.6% per year (not including his annual bonus), whereas mine has increased by 5.1% per year.

I was prepared for DH's salary to be much higher than the assumed 2%, but I was surprised that mine was so much higher. It makes me wonder how valid the assumptions are in the MSE calculator - I'm not sure they take into account the fact that graduates often move jobs in order to increase their salary and status, or get promoted, rather than sitting in the same job getting small inflationary rises each year.

Maybe it averages out with people like me (B.A., M.A., PhD) who haven't had a pay increase in years!

I graduate late 90s started on 14k moved up a bit but then worked p:t freelance round kids so I haven't a clue what a standard salary for me would be

Bsc & MSc. However I work for the NHS.., (top of my band and unable to go any higher). If I could go back to 1992 and do a different degree I would!

1993 8k
2022 60k

Not meteoric but I'm happy..

You can work it out using the calculator. Here is a screenshot of my calculation. I started on £13k and now, 29 years later, my (Full Time Equivalent) pay is £55k, so my average annual increase has been 5.1% per year.

I think there are too many unknowns for the calculator to be that useful to be honest.

Inflation and the economy, how much you change jobs/progress, whether you have any career breaks, parental leave, ill health, go part time etc will all have an impact on how your salary increases.

Wage growth over the last few years has been very low in some sectors and not everyone gets lots of promotions.

Going forward, if inflation stays how it is for more than a year or two, pay could (hopefully) increase significantly which will mean student loan repayments will also increase.

£11k in 2003, £82.5k in 2022.

I have changed career to a more lucrative industry, though, and don't have kids so have worked FT since graduating. If I had stayed in my original career choice, I could probably expect to be on around £50k now, tops.

Yes, of course there are many unknowns, but we have also worked through periods of recession when there were no rises. I left one of my employers (a tech company) to re-join the Higher Education sector, partly because it was more family friendly, but also because the tech firm didn't give me a rise for 2 years on the trot.

So, your average annual rise works out at 11.2%.

Blimey! Thank you for working that out for me. 😀

I wish my savings account had the same rate of growth!

Doesn't the 2% increase look at the market rate for the same job role over time e.g a checkout assistant or junior doctor over time. Whereas when you are looking at your own change in salary you need to take into account your increased skills and any resultant changes in job role.

If however you are in a role with limited opportunities to up skill and progress I assume overtime your salary increase will be closer to 2% e.g. A checkout assistant staying a checkout assistant may only get an increase of 2% whereas a junior doctor who ends up as a consultant will see a much higher increase.

1998 £10,250
2022 £250,000

Law

2004 29k
2022 34 k

Social worker. I did earn more before my child was born as was in management but returned to Social work level after maternity leave because I wanted to see him on occasions .

Crap public sector pay rises and ineffective unions…

I graduated in 1997 and my loans got written off last year as have never earned enough to pay them back. I’m a career loser!

started work after graduating in 1999, 5.7%
still with the same company, no breaks in career

If that's the rationale then it may indicate that the MSE editors are a bit out of touch with real graduate career paths. The calculator does let you change the 2% assumption, but you have to dig down to do it - I suspect most people won't think about it, or understand their future earning potential well enough to adjust it sensibly. The editorial is quite strident in its determination to persuade young people that they are unlikely to ever pay back the loan unless they are a "top earner".If I was graduating now and starting on a very realistic London starting salary of £27k I would pay back the full loan within the 30 years.