The need to stand out in a crowded job market has made master’s degrees more appealing than ever.

According to data from the Department for Education, the average salary three years after completing a master’s degree is £32,500—an 8.7% increase compared to those who enter the workforce directly after a bachelor’s degree, translating to a £2,600 pay boost.

However, just as A-level students must be wary of so-called “Mickey Mouse” degrees, prospective postgraduate students should carefully consider whether pursuing a master’s is worth the lost work experience, salary progression, and potential debt. In some cases, earning a master’s degree can actually reduce long-term earning potential by thousands of pounds.

More young people in the UK are opting to extend their studies, with 110,560 master’s degrees awarded in England in 2022—a 34.8% rise over four years, according to the Higher Education Statistics Agency.

For many, this decision proves financially beneficial. The most significant salary boosts were seen in education and teaching, where master’s graduates earned, on average, £11,400 more in the 2021/22 tax year—the most recent period with available data. This reflects the difference between bachelor’s degree holders, who are limited to private schools or early-years training, and those with a master’s degree, who qualify to teach in primary and secondary schools.

The data compares salaries of those with only a bachelor’s degree five years after graduation to those of master’s graduates three years post-degree (equivalent to five years after their undergraduate studies).

Master’s degrees in business and management (£9,200), law (£8,400), and computing (£6,900) also resulted in notable pay increases, assuming a two-year course duration.

However, for some graduates, skipping postgraduate study and entering the workforce immediately would have been the more financially rewarding choice—even before factoring in the additional tuition costs.

For instance, graduates with a master’s in language and area studies earned, on average, £4,000 less three years after completing their degree than those who had spent five years in the workforce with just a bachelor’s (£27,400 compared to £31,400).

Nearly a third of all academic disciplines (10 out of 32) showed a similar trend, including history and archaeology (£3,300 less), chemistry (£3,300 less), and English studies (£2,500 less). Meanwhile, three other subjects provided no salary advantage at all.

Despite these concerns, higher education still enhances job prospects for working-age adults. In 2022, the employment rate for graduates aged 16 to 64 was 87.3%, significantly higher than the 69.8% rate for school leavers.

Yet, completing a master’s does not substantially boost employment rates. Five years after earning their degree, 86.3% of bachelor’s graduates were in sustained employment, with this figure increasing by just 0.5 percentage points for those with a master’s.

Moreover, the financial advantage of postgraduate study appears to be diminishing. Between 2015/16 and 2021/22, salaries for bachelor’s degree holders grew by 16.8%—a modest 0.6% rise when adjusted for inflation. In contrast, those with a master’s saw only a 12.5% increase in earnings, which translates to a 3.2% real-terms decline.

This is particularly striking given that postgraduate students typically come from among the highest-achieving graduates.

Crucially, these figures only reflect gross earnings and do not account for the financial burden of additional years spent studying. With postgraduate tuition fees ranging anywhere from £5,000 to over £30,000, according to UCAS, the net benefits become even harder to justify.

Data from the Student Loans Company shows that borrowing for postgraduate degrees among English students peaked at £850 million in the 2021/22 tax year—a 58.1% surge over four years.

Moreover, the cost of repaying this debt is higher than for undergraduate loans. Bachelor’s degree borrowing falls under Plan 5, where interest is linked to the retail price index (RPI), which currently stands at 4.3% for this academic year.

Plan 3 is used to offer postgraduate loans, which raises the RPI by 3 percentage points to 7.3 percent at the moment.

These considerations might not be greater than the financial benefits of a master's degree throughout the course of a working life. However, thousands of wasted pounds could be an irreversible setback to young individuals at the bottom of the employment ladder.