Apprentices can earn up to 270% more over their lifetime than university graduates, reveals new research from Barclays and CEBR 15 Aug 2016 09:00 The Lifetime Earnings Premium  apprentices in Arts, Media and Publishing is currently 270 per cent higher than for graduates With rapidly increasing university fees, the Premium gap looks set to diminish entirely Apprentices earn an average ‘Lifetime Earning Premium’ of £117,600, more than those with just A-Levels – with graduates earning just £2,200 more over a lifetime, or 1.8 per cent more The research demonstrates that apprenticeships are a viable and worthy alternative to a university education and will become increasingly important to the UK economy A new report “Productivity and Lifetime Earnings of Apprentices and Graduates” jointly released today from Barclays and the Centre for Economics and Business Research (Cebr) has revealed that the average gap in lifetime earnings potential between apprentices and graduates is just 1.8 per cent, with the average ‘Lifetime Earning Premium’ (LEP) difference for the two study paths at just £2,200. In some sectors, apprentices’ LEP outstrips that of graduates by over 200 per cent - in industries such as Arts, Media and Publishing (270 per cent) and Agriculture, Horticulture and Animal Care (211 per cent). In other sectors, there is a significant difference in the LEP for apprentices including Social Sciences (10 per cent) and Languages, Literature and Culture (29 per cent). The report rebukes a range of common misconceptions about apprenticeships including that they are only relevant for those looking for careers in vocational or manual industries; Business, Administration and Law accounted for the most apprenticeship starts in 2014/15 (29 per cent), closely followed by Health, Public Services and Care (26 per cent). There were over 89,600 apprentice starts within the Retail and Commercial Enterprise Sector, and over 74,100 within the Engineering and Manufacturing Technologies sector. In addition, the report makes it clear that apprenticeships are a popular and feasible career path regardless of age – with 43 per cent of apprenticeship starts by people aged 25 and over in 2014/15 enrolling on programmes such as the Barclays Bolder, which has no upper age limit. The report also reveals that apprenticeships have grown substantially in popularity over time –uptake has more than doubled in the past decade, with almost half a million started in the 2014/15 academic year. Barclays predicts these figures will grow exponentially in the coming years as potential university applicants face a challenging and unpredictable financial landscape – with maintenance grants abolished and continuous increases in tuition fees creating a potential financial burden and putting university out of reach for many. Encouragingly, a new ‘Degree Apprenticeship’ was introduced in 2015 that allows apprentices to earn a full university equivalent qualification in their chosen sector without paying rising university tuition fees. Barclays is supporting the Degree Apprenticeships and has a target of offering at least 50 places on this scheme in 2016. Additionally, the Apprentice Levy introduced by the UK government this year is set to create three million apprenticeships in England by 2020. 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 learning 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. At Barclays, we firmly believe that apprenticeships should be considered a viable and valuable career path and a genuine alternative to university, and these new figures strongly back that up.” Rajini Jayasuriya from Cebr, said: “Currently, approximately 35 per cent of roles in the electricity, gas and water industry are vacant as a result of insufficient skills to meet business demands, but just 0.4 per cent of graduates chose to work in this sector in 2014/15. For the UK economy to grow further, the skills shortage will need to be addressed. Apprentices can fill the UK skills gaps, whilst offering a high level of productivity to the businesses they work for. Cebr’s findings suggest that through their apprenticeship programmes alone, Barclays make a key contribution to the UK’s stock of human capital, increasing net productivity by at least £3.3 million. The average net productivity gain for each Barclays Accountancy apprentice over the course of their programme is £18,000. This productivity boost not only benefits the apprentices themselves, but spills over into the whole economy and narrows the gap between the UK and its competitors abroad.” Mike Thompson continued, “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.” With around 2,700 participants since launching its award-winning Apprenticeship programme in April 2012, Barclays offers a variety of programmes to suit a range of levels, interests and ages - including Traineeships, Foundation, Advanced, Bolder, Higher & Degree Apprenticeships. Through these programmes, Barclays aims to offer candidates the opportunity to achieve far-reaching skills, experience and insight. Enabling candidates to earn while they learn, Barclays Higher and Degree Apprentices receive 100 per cent funding, along with a competitive salary and benefits. Find out more at www.barclays.co.uk/apprenticeships Notes to editors  The Lifetime Earnings Premium refers to the additional earnings potential of graduates and Level 4 apprentices over a lifetime, in comparison to employees with A-level qualifications only.  Academic year (1 August – 31 July)  Net productivity gain is the output per worker, per year, net of all costs of the scheme Cebr compare the earnings potential of Level 4 apprentices with graduates. The net earnings premium of a graduate degree is the difference between the lifetime earnings of an individual with a degree, and the lifetime earnings of an individual in possession of two or more GCE A-Levels. Similarly, the net earnings premium of a Level 4 apprenticeship is calculated as the difference between the lifetime earnings of an individual with a Level 4 apprenticeship, and the lifetime earnings of someone with two or more GCE A levels. Cebr use the lifetime earnings of an individual with A-Levels as the reference group, against which they compare how the lifetime earnings of apprentices and graduates can vary across similar subjects. This allows Cebr to isolate the earnings benefits of the qualification specifically, rather than any other personal or socioeconomic factors that can influence an individual’s earnings potential. To estimate the productivity benefits of Barclays’ apprenticeships, Cebr combine estimations of apprentice productivity across schemes, as established in BIS (2012), with recent apprenticeship enrolment data and training costs data provided by Barclays.  BIS, (2012) “Employer investment in apprenticeships and workplace learning: the fifth net benefits of training to employer’s study”, BIS Research paper no. 67 About the “Productivity and Lifetime Earnings of Apprentices and Graduates” report About Barclays Apprenticeships Launched in April 2012, Barclays began with just eight apprentices in Personal Banking and has since grown the programme in a number of units across the UK and also internationally – recruiting its 2,000th apprentice at the end of 2014. An apprenticeship helps those with little or no experience become ready for the world of work, and is designed to grow confidence and build experience and skills. It is not just an interim assignment, Barclays offer a permanent role and career pathway. By engaging in unemployed communities, Barclays is making careers in Banking and Financial Services more accessible to everyone, diluting the myth that a career in banking requires experience and qualifications. About Cebr The Centre for Economics and Business Research (Cebr) is an independent consultancy which advises some of the world’s largest companies. Cebr’s reputation for insightful economic analysis, award-winning forecasting and decisive business advice is based on innovative research by a renowned team of macro and micro-economists. Since its foundation in 1993, Cebr has been ‘making business sense’ by applying theoretical economics backed by quantitative evidence to real world decision for FTSE firms. It provides analysis, forecasts and strategic advice to major multinationals, financial institutions, government departments, charities and trade bodies. Press Office contacts For more information, contact firstname.lastname@example.org Interviews are available with Mike Thompson, Head of Apprenticeships at Barclays and Rajini Jayasuriya from Cebr Apprentice case studies are available The full report “Productivity and Lifetime Earnings of Apprentices and Graduates” is available on request About Barclays Barclays is a transatlantic consumer, corporate and investment bank offering products and services across personal, corporate and investment banking, credit cards and wealth management, with a strong presence in our two home markets of the UK and the US.With over 325 years of history and expertise in banking, Barclays operates in over 40 countries and employs approximately 130,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide. For further information about Barclays, please visit our website www.home.barclays .