Graduate affordability

Shocking statistics reveal how your birth place can affect your earnings TEN YEARS after you graduate

Have you ever wondered if where you were born affects how much you earn later in life? A new study, conducted by ​​ has revealed that it CAN affect your earnings, no matter which university you attended.

Propillo analysed official data from the Office for National Statistics (ONS), as well as the latest figures from the UK House Price Index (HPI) and graduate earnings one, three, five and 10 years after leaving university to determine the average salary after graduation, as well as the most and least affordable areas to live in the UK.

The figures have revealed that it’s bad news if you’re from the North East, as graduates born in this region will earn the lowest average salary than any other graduates from across the country. On average, those from the North East will earn £29,200 10 years after graduating.

In comparison, those from London will earn an additional £6,400 a year, bringing their total annual salary to £35,600, regardless of which university they attended.

The data highlights how social immobility is still rife within the UK, and regardless of which university you attend, your birthplace will still affect you later in life. A full table of earnings based on birthplace can be viewed below.

Birth region Average salary (10 years after graduation) Single cost of living per month (Incl. Mortgage)* Can afford to live in % of England (single) Can afford to live in % of England (couple)
North East £29,200.00 £647.00 70.17% 94.89%
North West £29,600.00 £721.83 71.02% 94.60%
Yorkshire and the Humber £29,600.00 £705.00 71.02% 94.60%
East Midlands £30,100.00 £769.33 72.44% 95.17%
West Midlands £30,200.00 £693.67 72.73% 95.45%
South West £30,500.00 £763.50 73.86% 96.02%
East of England £33,700.00 £812.50 79.83% 97.44%
South East £34,500.00 £905.83 82.67% 98.30%
London £35,600.00 £918.33 84.94% 98.30%

*Cost of living data for couples has not been included in the table above, but was used as part of the calcu​lations for the Can afford to live in% of England [Couple] column. The cost was 2.4 times higher.

While it’s an improvement on the £16,900 that those from the North East can expect to earn one year after leaving higher education, such a salary means those born in the region are less likely to be able to afford to live and work in different areas in England - just 70%, in fact.

Taking monthly mortgage payments and the cost of living into account, single graduates from the North East will, on average, only have £2,239.98 left over each year as complete disposable income or savings.

Finding a partner to share the costs of living makes life a lot easier; two graduates from the North East can afford to live in 94.89% of England, with average savings totalling a healthy £14,537.93.

Those born in London who earn the highest salary 10 years after graduating are fortunate enough to have more areas of England open up in terms of affordability: 84.94%, in fact.

Once again, coupling up has its financial advantages. A graduate couple both born in London can afford to live in 98.30% of England and will have a very healthy £24,839.38 in disposable income to spend or save each year.

So, what are the ​cheapest areas for graduates to live?

Based on the lowest graduate earnings (North East), the number one place to live in order to maximise the amount of disposable income each month and year is Burnley.

Single graduates living in this part of England will have a spare £13,113.68 each year - that’s over £1,092.81 per month of disposable income based on an average house price of £77,301.

The top five areas for singles to maximise their disposable income/savings can be found below.

Graduate Disposable Income/Savings - Singles

Region House price Disposable income (month) Disposable income (Annual)
Pendle £95,245 £1,017.67 £12,212.01
Sunderland £112,080 £1,022.01 £12,264.06
Hyndburn £92,727 £1,028.21 £12,338.54
Hartlepool £100,195 £1,071.77 £12,861.28
Burnley £77,301 £1,092.81 £13,113.68

With regards to the cheapest areas for couples to live, due to differences in the cost of living, Hartlepool comes top. Couples on the lowest salary (£29,200 each) living in this part of England will have a disposable income of £27,651.68 per annum. That’s over £2,304.31 per month.

The top five areas for couples to maximise their disposable income are below.

Graduate Disposable Income/Savings - Couples

Region House price Disposable income (month) Disposable income (annual)
Redcar and Cleveland £122,786 £2,209.71 £26,516.50
Burnley £77,301 £2,220.57 £26,646.88
Middlesbrough £113,175 £2,249.95 £26,999.44
Sunderland £112,080 £2,254.54 £27,054.46
Hartlepool £100,195 £2,304.31 £27,651.68

And finally, the areas of the UK that are completely off limits for graduates

Again, the calculations for this have been based on the lowest earning region of the UK, that being the North East.

Region House price Disposable income (month) Disposable income (annual)
Kensington And Chelsea £1,380,000 -£4,558.66 -£54,703.96
City of Westminster £1,025,871 -£3,075.77 -£36,909.24
Camden £821,464 -£2,219.83 -£26,637.95
City of London £755,178 -£1,942.26 -£23,307.12
Hammersmith and Fulham £744,263 -£1,896.55 -£22,758.65

If you would like to be in £54,704 debt per year, head to the luxury London borough of Kensington and Chelsea. The situation improves ​slightly if you couple up - you’re only £44,472 in debt per year - but with average house prices of £1,380,000 and monthly mortgage payments of £5,778.66 (after a 20% deposit), it’s clear this part of England is out of reach for everyone except the super rich.

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