A career established through a university education is arguably one of the most effective ways to safeguard long-term job security. The Institute of Student Employers (ISE) found that in 2020 the number of UK workers in professional level employment rose by 647,200 and those in other roles fell by 817,000 during the pandemic[i], and other ONS data reveals graduates were also less likely to be furloughed or in non-graduate jobs because of the impact of Covid-19.[ii] This demonstrates that in a rapidly changing world, a formal education is a key way that individuals can future-proof their job security in the long term. However, a degree in itself may not be sufficient, and students of tomorrow should also consider what subjects they secure degrees in by focusing on ‘future-proofed’ skills it may equip them with.
Will careers still require university graduates?
As our economy and workplace continue to become increasingly tech led, it’s the skills of graduates and professionals that will be in demand. Recent analysis by PWC suggests that artificial intelligence (AI) will increase demand for graduates by about 10% with those in healthcare, IT, and marketing in greatest demand.[i]
The number of graduate vacancies is now 20% higher than in 2019 before the Covid-19 pandemic, reports ISE, with job vacancies for graduates expected to increase by more than a fifth in 2022 compared to 2021[ii], a direct result of organisations recognising they have an increasing need for qualified skilled people.
Despite the rising demand for graduate workers, the importance of a university education is arguably being seen as less important amongst the UK population. Just 14% of UK adults see university as an important milestone to achieve in life, according to our research.[iii]
With tuition fees, the cost of rented accommodation and the cost of living all rising, students staying at home is a trend that could continue to grow in the UK.
E-learning: a saving grace?
While some might dispute the value of a virtual university experience, historically higher education institutes and universities have a physical campus with a high cost. If the cost of running universities were lower with a greater focus on virtual learning, it could mean more flexible fees for students.
Remote and virtual learning may not only offer savings on fees, but it could also enable students to cut the cost of a university education by studying at home.
While an ‘at-home’ degree may be financially advantageous for students, it can put further financial pressure on parents – resulting in them supporting their teenage children for longer than they had initially planned, squeezing their incomes and preventing parents from downsizing.[i] Our research finds UK adults are now reaching ‘empty nester’ status 2.7 years later than they had originally planned to, while downsizing plans have also been postponed by a similar 2.8 years.[ii] This could mean we see further postponement of parents’ later-life ambitions in the future.
Cost vs opportunity
Despite the expected increase in professionalised roles which will require a university education, increasingly young people are becoming reluctant to embark on a university education due to the price tag associated with it and the compromise on living conditions which may have to be made.
As students navigate the private rental market – attempting to balance constantly increasing living costs along with a fulfilling student experience – it’s predicted that more flexible and remote educational offerings will be provided from leading universities to navigate this.
As they face potential financial hardships, young people will desire assurance that the cost of attending university will be rewarded in terms of the job they end up securing. This puts more pressure than ever on securing a degree that will lead to a top career.
The changing landscape for education however presents an opportunity to gain studies without having to incur the cost of accommodation but may come at a loss of the ‘experience’. The choice of studies may also be driven more by financial outcomes and less by interest in a topic.
Parents: baring the burden of the costs
While technology could enable university to become more financially attainable in the future by enabling students to remain at home, in reality this could in fact just mean the transfer of the financial cost from teens onto parents. With more stay-at-home students, the support parents will offer children in the 2040s will likely extend far beyond the traditional age of 18, so parents should plan ahead. Some decisions families might opt for include choosing not to pay for education in the early years, preserving that support for later down the road. Parents may also want to consider saving on their child’s behalf to provide a fund that can support them as they enter adulthood, by setting up a cash or investment Junior ISA. The latter could provide more meaningful growth over their childhood, but it’s important to remember investments do carry risk.
Do you have a plan to fund education?’
Evelyn Partners is here to help. Our financial planners can work with you to map out the potential costs of education, and how best to use the assets you have to afford your future ambitions and help future generations.
The value of investments, and the income from them, may go down as well as up and investors may get back less than the amount originally invested.
Prevailing tax rates and reliefs depend on individual circumstances and are subject to change.
This article is solely for information purposes and is not intended to be and should not be construed as investment advice. Whilst considerable care has been taken to ensure the information contained within this article is accurate and up to date, no warranty is given as to the accuracy or completeness of any information and no liability is accepted for any errors or omissions in such information or any action taken on the basis of this information.