Graduates will earn on average 20% more over their working lives than those who did not attend university.

For women, earnings increase by £100,000 on average with a degree while men go on to earn £130,000 more than non-graduates over their working lives, after student loan payments and taxes have been considered.

But for those studying medicine or economics, lifetime earnings reach £500,000 more for men and £250,000 for women compared to non-graduates.

The research carried out by the Institute for Fiscal Studies (IFS) reveals the benefits a degree can provide to students, the economy and society.

It suggested the economy gains £240,000 per male graduate and £130,000 per female graduate on average over a lifetime.

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Universities minister, Michelle Donelan, said: “This research underlines that our university sector is world leading by setting out the impact higher education can have on someone’s life.

“When you add the unquantifiable experiences and friendships that come with that, it is no surprise our universities attract students from all over the world.

“However, that prestige is built on quality and my role is to work with the regulator to safeguard that, while ensuring students and the taxpayer are getting the value they would expect for their investment.”

The overall cost of higher education is split between the government and student contributions.

A review of post-18 education and funding published last year made recommendations on the balance of funding between universities, further education and apprenticeships and adult learning.

The government is now considering these recommendations and will respond at the spending review set for later in the year.