Student Loans Contents
Appendix 1: Graduate earnings profile methodology
Nominal pay growth for all examples is assumed to rise at an annual rate of 4.3 per cent, consistent with long-term economic determinants used in the OBR’s 2017 Fiscal Sustainability Report.
RPI is assumed to be 3.0 per cent, consistent with long-term economic determinants used in the OBR’s 2016 Fiscal Sustainability Report.
Civil servants: pay progression consistent with in a typical Whitehall government department for a fast-stream graduate entrant. Thereafter, promotion to Grade 6 and SCS1 is assumed.
- Years 1–4: fast-stream grade
- Years 5–9: Grade 7
- Years 10–14: Grade 6
- Years 15 onwards: SCS1
Teachers: pay consistent with steady career progression and acquisition of growing professional and leadership responsibilities.
- Years 1–6: main pay range
- Years 7–12: upper pay range, with a TLR2 payment from year 8
- Years 13 onwards: leadership pay range (broadly consistent with assistant headship)
Magic circle law firm:
- Years 1 and 2 (training contract): £44k year 1 and £49k year 2
- Years 3–14: pay tracks figures on average pay for post-qualification lawyers in ‘magic circle’ firms from HIA Legal 2017 Salary Guide
- Years 15+: progression to partner is assumed, but is irrelevant to the example because the loan is paid off by this point
- Years 1–3: pre-qualification pay based on average among large accountancy firms
- Year 4+: pay tracks average earnings (including bonus) for UK respondents to ICAEW 2015 Salary Survey
- Year 1+: pay is £28,600, consistent with median gross weekly earnings of UK full-time employees