A study by the Chartered Institute of Personnel and Development into the impact of tuition fees has found that a third of graduates believe they chose the wrong degree.
Many feel the costs and related debts are stopping them from buying a house, starting a family and saving for retirement.
The new survey Graduates in the workplace – does a degree add value? finds that 23 per cent of those who graduated in 2005 who would choose a different course would opt for a more scientific/technical course and 22 per cent would choose a business-based course or a professional qualification.
Victoria Winkler, CIPD learning, training and development adviser, says: “A combination of fierce competition for graduate jobs and graduates taking longer to find work appears to be having an impact on their views about their choice of degree.
“The findings show that with reflection many graduates would study a subject that relates directly to business or that will better equip them with skills that are transferable into the workplace.
“These findings suggest that the government needs to work alongside employers to find out what skills are needed in the workplace. This information then needs to be fed into schools and colleges so that school leavers have the information needed to make a more informed decision about the course they choose to study and their future career.”
The study also reveals that average graduate starting salaries rose by eight per cent between 2000 and 2005 – below both inflation and rises in average earnings. As a consequence, many new graduates say it is difficult to get a foot on the property ladder and a third of 2005 graduates are not contributing towards a pension.
Although there is a rapid rise in salary once graduates start working – year 2000 graduates have seen their salary increase by an average 55 per cent to a mean current salary of £27,879 – one-fifth of those who graduated in 2000 still fail to contribute to a pension.
John Philpott, CIPD chief economist, says: “The increase in starting salaries over the last five years is well below the increase in both retail price inflation and average earnings during the same period.
“A combination of the drop in starting salaries, slightly weaker labour market conditions and increased inflation makes it much more difficult for many new graduates to get a foot on the property ladder and to start saving for retirement.
“The rapid increase in salary once graduates are working enables them to start to repay debt and gain a foothold on the housing ladder. But the obvious temptation will be to devote whatever disposable income is left after meeting debt repayments and essential living costs to lifestyle spending – socialising, holidays – rather than saving for the future.”
The survey, which will be published in full in January, also reveals that the gender pay gap is alive, well and growing. Female graduates in 2005 had an average starting salary 14 per cent below their male counterparts, double the gap reported in 2001.
And women who graduated in 2005 are 12 times more likely than men to believe their gender is holding them back in their career.
Yet even though they might question their choice of degree, 90 per cent of graduates said they would still choose to go to university if they had their time again. Benefits cited include independence, career progression, communication skills, presentation skills, team-work and confidence.