The Broken Promises Made to UK Graduates
You did everything right. So why does it feel like you're losing?
If you’ve spent the last few months firing off job applications into the void, you’re not imagining it. The graduate job market is… broken.
Recent figures show that 1.2 million applications were submitted for just 17,000 UK graduate roles last year – the highest competition ever recorded since tracking began in 1991 [1].
Stories of graduates applying to over 600 jobs before finally landing one are becoming increasingly common – if not the norm. [2]
Meanwhile, entry-level job postings have dropped by nearly a third since ChatGPT launched, as companies figure out they can get AI to do the tasks they used to give to juniors [3].
So if you're stuck in your childhood bedroom wondering what went wrong – nothing went wrong. You didn't go wrong. The promises made to our generation just didn't hold up.
This isn't about making you feel worse (the media does that fine on its own). It's about understanding what actually happened, and what you can actually do about it.
Consider it the honest money conversation your parent or careers advisor never had with you.
Broken Promise #1: "Get a degree, get a good job"
The promise
Work hard. Get the grades. Go to uni. Graduate. Get hired. Simples.
The reality
Graduate job vacancies dropped over 30% in 2024 - twice the decline of the wider job market [3]. The result: more competition, more rejections, and more ‘entry-level’ roles that confusingly require years of experience.
But here’s the reframe: your first job doesn’t have to be your forever career. Your 20s are the perfect time to experiment – to try different industries, discover what you’re goods at, and figure out what you actually enjoy before the build up of responsibilities makes it harder to take risks
What to do about it
Treat your first job like a launchpad, not a life sentence. It doesn’t need to be perfect – it needs to teach you something. Skills, industry knowledge, what you don’t want to do – it all counts.
Embrace the experimentation phase. Your 20s are for trying things. A ‘wrong’ job isn’t wasted time if you learn from it. Most successful people took winding paths to get there.
Start an emergency buffer. Job instability is the new normal. If '3 months expenses' feels impossible, start with £500 and build from there. This gives you options – including the freedom to leave a bad job.
Track your pension from day one. Every time you change jobs, note down your pension provider and login details. There's over £30 billion sitting in lost pension pots across the UK – don't add to that pile [4].
Negotiate beyond salary. Ask about pension matching and benefits. An extra 1-2% employer match might sound boring, but it's free money that compounds over decades.
Broken Promise #2: "Your degree will pay for itself"
The promise
Student debt is “good debt”. The graduate premium will cover it. It’s an investment. Everyone nodded. You signed.
The Reality
If you’ve logged into your student loan account and watched the loan value go up despite making payments – you're not imagining things and you’re not alone.
Here's why: Interest on Plan 2 loans is linked to the Retail Price Index (RPI) – a measure of inflation – plus up to 3% on top. When inflation spiked, interest rates on student loans hit 7.3%+ [5]. In 2023-24, the interest being added to loans was three times the value of repayments being made [6]. For every £1 paid off, £3 got added.
This sounds terrifying. But here's what most people don't understand: for many graduates, the balance doesn't actually matter.
Only 32% of Plan 2 borrowers are expected to fully repay their loans [6]. The rest pay for 30 years, then the remaining balance gets written off – whether that's £5 or £50,000. It's less like a mortgage and more like a graduate tax.
What to do about it
Know your plan and threshold. Plan 2 (started uni 2012-2023): repay 9% of earnings above £28,470. Plan 5 (from 2023): 9% of earnings above £25,000. Earn below the threshold? You repay nothing [7].
Stop obsessing over the balance. Your monthly repayment is based on your income, not your balance. Focus on your career trajectory, not the scary number on your loan statement.
Only overpay if it makes sense to. If you won't clear the loan balance before write-off, every overpayment is money you're giving away that would have been cancelled anyway. Generally, overpaying only makes sense if you're consistently earning £50k+ and likely to fully repay.
Check if your employer offers salary sacrifice. Pension contributions via salary sacrifice reduce your gross pay – which means lower student loan repayments too. £100 into your pension might only reduce your take-home by £60-70 (depending on tax band and loan plan).
Direct your energy elsewhere. Student loan repayments happen automatically. Your pension, savings, and emergency fund won't build themselves. Focus on what you can control.
Broken Promise #3: "Work hard and you’ll get ahead"
The promise
Put in the hours. Climb the ladder, Effort equals reward.
The reality
The connection between hard work and getting ahead has weakened – and it's not just a feeling.
Real wages in the UK grew by just 2.2% total over 16 years (2008-2024) – that's not per year, that's the entire period [8]. Entry-level graduate salaries are now lower in real terms than before the 2008 financial crisis, and they're converging towards the minimum wage [9].
UK productivity has grown at just 0.5% annually since 2019, compared to 2-3% in previous decades. When productivity stagnates, wages stagnate too – no matter how hard you work.
The playbook shifts: grinding harder won't fix this. You need strategy.
What to do about it
Invest in your network, not just your skills. Research shows 39% of UK workers found their job through their network, and referrals are 7x more likely to be hired than job board applicants [10]. Who you know often matters more than how hard you grind. LinkedIn messages, coffee chats, alumni connections – these aren't optional extras.
Think total compensation, not just salary. A £30k job with 8% employer pension match is worth £32,400+. A £32k job with 3% match is worth £32,960. The headline number doesn't tell the whole story.
Job-hop strategically. Loyalty rarely pays like it used to. External moves typically deliver 10-20% raises vs 2-4% internal. But check pension terms before jumping – don't trade a great match for a slightly bigger number.
Automate your raises. Each time your pay goes up, increase your pension contribution by at least a third of the raise. You won't miss money you never saw, and it prevents lifestyle creep from eating all your progress.
Build one money system you'll actually use. A simple budget you stick to beats a perfect spreadsheet you abandon. Automate what you can – pension, savings, bills – and free up mental energy for the things that matter.
Broken Promise #4: "You’ll be able to buy a house"
The promise
Get a job, save a deposit, buy a starter place, build equity. Renting is “throwing money away”.
The reality
The average house price is nearly 8x the average salary [11]. The historical average? 3.9x.
Around 40% of first-time buyers now need help from family [12]. If yours can help, great. If not, you're competing with people who have a 10-year head start on their saving journey.
Not being able to afford a house doesn't mean you're failing. It means your strategy needs to be different from your parents' generation.
What to do about it
Consider a Lifetime ISA. Save up to £4,000/year and get a 25% government bonus [13]. Use it for a first home, or keep it for retirement if buying doesn't happen. Either way, you benefit.
Don't sacrifice free pension money for a deposit. At minimum, get your full employer match – that's an immediate 100% return. Pausing contributions to save faster for a house often costs more in the long run than it saves.
Reframe renting. Renting isn't "throwing money away" – it's paying for somewhere to live. Buying has hidden costs too: maintenance, insurance, mortgage interest, stamp duty. Sometimes renting and investing actually wins financially over buying a house.
Build wealth through other vehicles. If property isn't happening, invest elsewhere – pensions, ISAs, diversified funds. Stock markets have historically returned 7-10% annually over the long term [Curvo]. Property isn't the only path to wealth – it's just the one your parents knew. (Capital is at risk when investing.)
Promise #5: "The system will look after you"
The promise
Pay taxes, work your career, retire comfortably. State pension. NHS. Safety net.
The reality
The full new State Pension is £230.25/week for 2025/26 – about £12,000 a year [14]. Try living on that. Rent, bills, food, heating – for potentially 30+ years of retirement.
Your grandparents often had final salary pensions – guaranteed income for life based on what they earned. Those barely exist now. What you get in retirement depends almost entirely on what you put in yourself.
What to do about it
Know what the State Pension actually provides. £12,000/year is a foundation, not a retirement plan. The gap between that and what you'd actually need? That's yours to fill.
Treat auto-enrolment as a starting point. The legal minimum is 8% total (with at least 3% from your employer) [15]. Aim to build toward 12-15% over time. Can't do that today? Add 1% with each pay rise.
If you're self-employed, this is even more critical. You're not automatically enrolled in anything. No employer match. No default contributions. It's entirely on you – which means you need to set it up yourself.
Start small, but start now. Time is genuinely your superpower here. £100/month from age 25 can grow to more than £250/month from age 40 due to compound growth. The earlier you start, the less heavy lifting you need to do later.
So now what?
Okay. That was heavy. But reality is weirdly freeing: you can stop blaming yourself for missing targets the system wasn't designed to let you hit.
The broken promises aren't your fault. What you do next is up to you.
“But I can’t afford to save.”
Heard and very much understood.
That’s exactly why we built Chest: to help you build a pension through everyday actions you’re already taking. Cashback from shopping with brands you already use can be paid into your pension - so progress doesn’t rely on willpower (or having loads left at the end of the month).
Learn more about Chest here.
Important information
Capital is at risk when investing. The value of investments can go down as well as up, and you may get back less than you invest. Tax treatment depends on individual circumstances and may change in the future. This article is for information purposes only and does not constitute financial advice. Cashback contributions are discretionary.
References
[1] Fortune – 1.2 million applications for 17,000 graduate roles. Link
[2] Morson – Graduate job market challenges and entry-level decline. Link
[3] Fortune Europe – Graduate vacancy decline. Link
[4] Pensions UK - Brits missing £31.1bn in unclaimed pension pots Link
[5] House of Commons Library – Student loans and interest rates FAQs. Link
[6] House of Commons Library – Student loan statistics. Link
[7] Gov.uk – Student loan repayment thresholds. Link
[8] Resolution Foundation – Real wages grew 2.2% over 16 years. Link
[9] The Conversation – Graduate salaries converging towards minimum wage. Link
[10] StandOut CV – Networking statistics. Link
[11] ONS – Housing affordability in England and Wales. Link
[12] Nationwide – First-time buyer family assistance. Link
[13] Gov.uk – Lifetime ISA. Link
[14] Gov.uk – State Pension amounts. Link
[15] Gov.uk – Workplace pension contributions. Link
