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Graduates in their 20s are earning less in real terms than they were before the 2008 financial crash, and are £1,200 worse off than they were at the start of the pandemic on average, despite recent cuts to national insurance.

Chancellor Jeremy Hunt has teased further national insurance cuts in his upcoming budget, following on from the recent decrease announced in his autumn statement.

It could be welcome news to some who have seen their pay packets squeezed over recent years as a result of the cost of living crisis, though economists have warned tax cuts would be unaffordable and would need to be reversed after an election.

People aged between 22 and 29 are earning less in real terms now than they were in 2002.

This is when factoring in inflation, including rising housing and food costs, over the period.

In 2023 prices, the median salary for a graduate in their 20s is £23,990 after paying taxes and student loan – compared with £25,200 in 2020.

Helen Miller, deputy director of the Institute for Fiscal Studies (IFS), said: “This comes in the context of an ongoing, multi-year freeze to personal tax thresholds.

“By 2027 (the last year of the planned freezes), an employee earning £35,000 will be paying about £440 a year more in direct tax overall as a result of all the changes to income tax and NICs since 2021.

“The government has announced significant tax rises. Regardless of what the chancellor announces in the budget, it is highly likely that this will be the largest tax-raising parliament on record.”

Changes to student loan plans

Student loan repayments are set at 9% of income above the salary threshold, which has been frozen at £27,295 since 2021/22.

Still, a recent graduate on an average income is currently paying around £13 a month towards their student loan, so is it really a big deal?

A big factor in the impact of student debt is not just how much people pay back per month, but how much they pay back over their working lives, and when they started university.

Those who went to university on ‘Plan 2’ higher university fees (£9,000 and above from 2012/13) will pay back almost £20,000 more than the previous ‘Plan 1’ cohort in their lifetime, according to estimates by the IFS.

Those who started in the 2023 academic year or later will be eligible for ‘Plan 5’ student loans, which have different repayment terms.

The threshold will increase in line with the Retail Prices Index (a measure of inflation) instead – meaning it will likely increase more slowly than under the previous policy and more graduates will start paying back their debt sooner.

Under the new system, student debt will only be written off after 40 years rather than 30, meaning many will make repayments for longer, potentially into their 60s.

This particularly affects low to middle earners, who are less likely to have paid off their debt after 30 years.

However, under this new system no borrower will repay more than they borrowed (in real RPI terms) – so the highest earners can expect to repay significantly less than if they had started university in 2022 due to the lower interest rate.

On the other hand, people on lower incomes will end up paying back more.

‘A thundercloud waiting to burst’

Dr Farhana Ghaffar, researcher at the University of East Anglia, has been looking at the impact of the post-2012 loan system on students and young people and interviewed graduates who had been through this system to see how it had affected them.

“The idea was generally that a university degree would set you up for life, so it would set you up for a particular kind of life where you’d be able to have a home, start a family,” she said.

But in exchange for this, students are taking on “enormous” amounts of debt, which can have an emotional impact.

“I think sort of five or six years on, they were constantly worried about the debt that was getting bigger and bigger. And obviously they couldn’t do anything about it.

“They’re not at a stage yet where I think we can kind of talk too much about the long-term impacts. But something that was really striking is it was a future worry.

“You know, ‘when I get a mortgage’ or ‘when I start a family’. Someone described it almost as being like a thundercloud, waiting to burst and they just didn’t know when it would happen.”

Anastasia is a Romanian student at the University of Dundee. Her tuition fees are free because she started studying in Scotland while the UK was part of the EU.

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English students still have to pay to study in Scotland but students from other EU countries could study for free, as Scottish students do.

Anastasia isn’t sure if she would have gone to university at all if she had to pay fees.

She said: “I’d have to take a few months to think about it. And really, really think about it. I don’t think it’s a decision I could make just like that.

“If there was a way of knowing the payments would be acceptable and manageable – even though I probably won’t have a good job right after I graduate – maybe I would do that but very low chances.

But Anastasia knows that decision too could affect her future prospects, saying “[we are] in a world where everybody expects you to have a diploma for anything”.

“There are so many companies out there that will not give you the job even though you’re fully able to give them a wonderful performance, if you don’t have a diploma.”


The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open-source information. Through multimedia storytelling, we aim to better explain the world while also showing how our journalism is done.

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English water firms get lowest environmental rating since records began

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English water firms get lowest environmental rating since records began

English water companies have collectively been given the lowest environmental rating by the Environment Agency (EA) since records began.

Companies were ranked on a scale of one to four stars. Out of a maximum score of 36 stars for all nine companies, the firms together scored 19, the lowest since the EA began monitoring.

The only utility to receive the highest four-star rank was Severn Trent, the agency said in its annual performance assessment.

The number of serious incidents, in which “significant” environmental harm was caused, increased by 60% last year compared to 2023.

Just three companies were responsible for the vast majority of incidents.

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Thames Water – the country’s biggest supplier – Southern Water and Yorkshire Water were responsible for 81% of all incidents.

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Only two firms out of nine – Northumbrian Water and Wessex Water – recorded no serious incidents.

More monitoring, inspections and data have meant that knowledge of pollution in English waterways is now greater than ever. In turn, the amount of reporting has been greater.

Other factors driving the figures are underinvestment and poor maintenance of infrastructure, as well as wet and stormy weather.

Firms have again been called on by the Environment Agency to “urgently” improve their performance. There had previously been a trend of improvement since records began in 2011, but the latest figures indicated a “dip”.

In addition to pollution incidents, companies were assessed on self-reporting and compliance with permits.

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Is Thames Water a step closer to nationalisation?

A separate report by water regulator Ofwat published on Thursday showed “mixed” performance with improvements in sewer flooding and pipe leakage, but only two companies reported a reduction in pollution incidents over five years.

Regulation of the sector has been criticised in a once-in-a-generation review of the water industry by career civil servant Sir Jon Cunliffe. In the wake of it, the government says Ofwat is to be retired.

Pressure has mounted on utilities across the UK as the public has sought action on poor water quality and rising bills.

Thames Water, in particular, is struggling under a £20bn debt pile with the government lining up insolvency practitioners.

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Autistic volunteer told he could no longer work for Waitrose hired by Asda

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Autistic volunteer told he could no longer work for Waitrose hired by Asda

An autistic man who was told he could no longer stack shelves at Waitrose when he asked to be paid has been offered a job by Asda.

Tom Boyd, 28, began volunteering unpaid at the branch of Waitrose in Cheadle Hulme, Greater Manchester, in 2021, supported by a care worker, to develop skills for the workplace on a further education course he was taking.

The work gave him a sense of “purpose and belonging”, his mother, Frances Boyd, told the BBC.

When she asked in July if he could be paid for a few hours every week, however, the supermarket’s head office told him he had to stop and could not return to the shop.

Ms Boyd said they felt “deeply let down” by the decision as he had taken great pride in his work, which included putting out stock and tidying the shelves.

“If I went in and saw him, he was smiling, and it gave him independence, a sense of purpose and belonging,” she said.

“He gave over 600 hours of his time purely because he wanted to belong, contribute, and make a difference…

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“He deserved better. He deserved kindness, respect and the chance for all his hard work to mean something.”

Mr Boyd has now been offered two paid five-hour shifts each week by Asda.

“It’s overwhelming and they are flexible to say if at any time he is struggling they are fine,” his mother said.

“How amazing that a company could do this.”

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Welcoming the news on X, Greater Manchester mayor Andy Burnham said he hoped it would lead to more employers accepting a neurodivergent code of best practice he has launched.

An Asda spokesperson said that when the store heard about Mr Boyd’s desire to find meaningful work they knew he would be a “fantastic fit” and were delighted to offer him a role.

“We know that finding meaningful work can be especially challenging for individuals with learning disabilities or difficulties,” they said.

“Asda has a Supported Internship Programme and partnership with DFN Project SEARCH, through which we have welcomed over 30 talented new colleagues into roles across our stores. We have seen the positive impact this has for the individuals who join and for our colleagues and customers too.”

A Waitrose spokesperson said they “care deeply” about helping people into the workplace who might not otherwise be given a chance and that the chain is currently investigating what happened to Mr Boyd.

“We’d like to welcome Tom back, in paid employment, and are seeking support from his family and the charity to do so. We hope to see him back with us very soon,” they added.

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Power of Russia sanctions lies in US financial system that greases the wheels

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Power of Russia sanctions lies in US financial system that greases the wheels

US sanctions against Russia’s two largest energy companies, the state-owned Rosneft and privately held Lukoil, are perhaps the most significant economic measures imposed by the West since the invasion of Ukraine.

If fully implemented, they have the potential to significantly choke off the flow of fossil fuel revenue that funds Russia’s war machine, but their power lies not in directly denying Russia access to the tankers, ports and refineries that make the oil trade turn, but the US financial system that greases the wheels.

Ever since the invasion, the Russian government has proved masterful at evading sanctions, aided and abetted by allies of economic convenience and an oil industry with decades of experience.

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New US sanctions on Russia: What do we know?

While the West, principally the EU, has largely turned off the taps and stopped buying Russian oil, China, India and Turkey became the largest consumers, with a shadow fleet of tankers ensuring exports continued to flow.

Data from the Centre for Research into Energy and Clean Air (CREA) shows that while fossil fuel revenues have fallen from more than €1bn a day before the war, they have remained above €600m since the start of 2023, only dipping towards €500m in the last month.

None of that oil has been heading for the US, but these sanctions will directly impact the ability of the Russian companies, and anyone doing business with them, to operate within America’s financial orbit.

According to the order from the US Office for Foreign Asset Control, the sanctions block all assets of the two companies, their subsidiaries and a number of named individuals, as well as preventing US citizens or financial institutions from doing business with them.

It also threatens foreign financial institutions that “facilitate transactions… involving Russia’s military-industrial base” with direct or secondary sanctions.

Vladimir Putin chairs a meeting in Moscow.
Pic: Sputnik/Reuters
Image:
Vladimir Putin chairs a meeting in Moscow.
Pic: Sputnik/Reuters

In practice, the measures should prevent the two companies from accessing not just dollars, but trading markets, insurance and other services with any financial connection to the US.

Taken in harness with similar steps announced by the UK earlier this month, analysts believe they can have a genuinely chilling effect on the market for Russian oil and gas.

Russia’s customers for oil in China, India and Turkey will also be affected, with the largest companies, state-owned and private, expected to be unwilling to take the risk of engaging directly with sanctioned entities.

Indian companies are already reported to be “recalibrating” their imports following the announcement, which came just a week after Donald Trump announced an additional 25% import tariff on Indian goods as punishment for the country’s reliance on Russian oil.

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That does not mean that Russian oil and gas exports will cease. There are other unsanctioned Russian energy companies that can still trade, and ever since the first barrel of oil was tapped, the industry has proved adept at evading sanctions intended to interrupt its flow from one country or another.

Any significant increase in the oil price beyond the 5% seen in the aftermath of the announcement could also put pressure on the White House, which is at least as sensitive to fuel prices at home as it is to foreign wars.

But analysts Kpler expect the sanctions to cause “an immediate, short-term hiatus in Russian crude exports, as it will take time for sellers to reorganise and rebuild their trading systems to circumvent restrictions and ease buyers’ concerns”.

And Russian gas will, for now, continue to flow into Europe, where distaste for Vladimir Putin‘s imperial ambitions has not killed the appetite for his fuel. While the EU has this week imposed sanctions on liquified natural gas (LNG), they will not be fully enforced until 2027.

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