Endsleigh News & Press Releases

1 December 2004

Graduate Debt and Salary Survey Shows Wide Disparity and Unrealistic Expectations for Repayment.

Graduates Expect Average Debts to be In Excess of £12,000 and Repaid Over Eight Years.

→ Endsleigh National Graduate Debt Survey 2004

Endsleigh, the specialist insurer for career people, today called for financial education to be made a core part of university and college tuition after uncovering huge disparity in both the level of predicted debt and the rate at which graduates will be able to pay it off. The call comes following an Endsleigh survey of more than 11,000 students at universities and colleges across the country to help determine Endsleigh's future spending plans in the graduate market and shape its product offerings.

Male students believe they will graduate with average debts of £12,822 while female students expect to owe £12,262. With predicted starting salaries upon graduation of £18,755 and £17,809 respectively, Citizens Advice says that while advisers usually advise people to pay down debt balances as soon as possible to reduce interest costs, both male and female graduates are likely to feel pressured and find it difficult to meet both their predicted repayment timescale of eight years. Meanwhile the National Union of Students has warned students of the impact of accrued debts on their choices for the future.

The key findings of the 2004 Endsleigh Graduate Debt Survey were as follows:

Graduate Debt

Graduates from London universities are likely to be the most indebted with all seven of the highest male debts and the top three female debts. The highest predicted debt in the country is Queen Mary, University of London with £19,550 for male graduates and £19,762 for female graduates. The universities of Strathclyde, Newcastle, Brighton and Sheffield featured amongst the lowest indebtedness for both male and female but graduates from all, with the exception of Strathclyde, expect to leave with debts of over £10,000.

Debt Repayment

The expected repayment period of debt upon graduation varied hugely. Both males and females graduating from the University of Brighton believed they would repay their debts in just four years, the lowest in the country. This was despite the fact that males expected to both owe more and earn less than their female counterparts upon graduation. Female graduates from the University of Middlesex and Goldsmiths College expect to take thirteen years to repay their debts, the longest prediction in the country.

Starting Graduate Salaries

Starting salaries showed a variation of more than £8,000 from highest to lowest. Male graduates from the School of African and Oriental Studies (SOAS) expect to earn an average of £23,024, followed by Keele University (£22,770), the London School of Economics (LSE) (£22,467) and University College London (£22,449). The lowest expected male graduate salary of £15,385 is at Paisley University.

The national average female starting salary is expected to be £1,000 less than for male graduates. The top female salaries are expected from Keele (£21,852), the LSE (£21,456), Queen Mary, University of London (£21,407) and SOAS (£21,212). Lowest graduate starting salaries are expected by women from the universities of Staffordshire (£14,532), Leeds (£14,552) and Liverpool (£15,111).

The survey was conducted to help Endsleigh predict graduate spending patterns on possessions such as motor vehicles, computers and new clothes; and other major financial decisions such as the purchase of new homes or holidays. Students were asked to estimate their level of debt upon graduation by combining debts to various creditors including the Student Loans Company, credit cards, family, banks, sponsorships and the universities and colleges themselves.

Tim Larden, spokesman for Endsleigh, said:

"As a leading insurer of career people, we are keen to understand and predict their future spending patterns so that we can ensure we respond to customer need. What we have found, however, is that young graduates expect to be able to pay off their debts in wildly different repayment timetables even when their starting salaries are comparable. Endsleigh believes that young graduates would be best entering the workplace with an understanding of the different types of debt they have, how the different interest regimes work and therefore how long they will realistically have to take to repay them. Financial education during their studies could make a big difference to the quality of life for graduates of the future. Young graduates are a major market for Endsleigh in terms of motor possession, and holiday insurance, as well as mortgages."

Citizens Advice Head of Policy, Dan Vale, said:

"The survey shows just how difficult it is for people to make a realistic assessment of pack-back rates of credit. Greater awareness of how to shop wisely for credit and cope with debt is needed among graduates just as much as in the rest of the population.

"The CAB service deals with over one million enquiries about debt every year. We would urge any graduate who is worried about repaying their student debts to visit their local CAB for free and confidential advice."

Helen Symons, Vice President Welfare of the National Union of Students said:

"This survey shows that for a growing number of graduates, debt will be a harsh fact of life. Many students may be able to act to reduce the size of their graduate debt while they are at university or college. NUS advises students to seek advice from their students' union on financial planning and to find out if they could be entitled to any hardship funds or grants from their institution. We would also caution against commercial debt and credit cards, as what starts with a low interest rate and a free gift at freshers can become a massive burden before and after graduation. Students should be careful of how much debt they get into and remember that whilst it may be easy to get into debt while you're studying, getting out of debt again afterwards can take years."

- ENDS -

Notes to editors

Endsleigh is an independent intermediary specialising in the provision of insurance and financial products for career people.

Originally founded in 1965 to serve the student market, Endsleigh is now the preferred insurance supplier for a variety of professional organisations, offering a wide range of services including motor, home, student and travel insurance.

Endsleigh also offers business insurance through Endsleigh Business Insurance Services and financial advice through Endsleigh Financial Independent Tailoring.

Contact Details
For further information about Endsleigh, to arrange an interview or to get more details about case studies, please contact:

Bridget Hargreave, Nick Faith, Aideen McDonald or Ben Frankel at Luther Pendragon on 020 7618 9100 or at endsleigh@luther.co.uk.

Endsleigh Insurance Services Limited is authorised and regulated by the Financial Services Authority. This can be checked on the FSA Register by visiting its web site at www.fsa.gov.uk/register.
Endsleigh Insurance Services Limited. Company No: 856706 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.