Higher education systems in Europe are facing new challenges in raising employability of students. The fast pace of technological advancements, interdisciplinary work organisation and globalisation of the work market are the main features of the modern knowledge-based society. Equipping students with competences that are required for their social and professional integration, successful career and personal development is becoming a key mission of the educational sector. The appropriate choice of teaching methods is instrumental to a successful implementation this task. Fostering effective teaching and learning methods such as discussions, group work, case studies, problem-based learning (PBL), peer-assisted learning (PAL) and critical thinking facilitates the acquisition of professional skills and competences. The paper explores the opportunities to introduce PBL and PAL in delivering a range of modules across the Faculty of Science and Technology at Lancaster University, UK. This study is based on the outcomes of the pilot which has been carried out at University Väst in Sweden. The PBL method has been already successfully used there in delivering a ‘Decision Mathematics’ module to the first year students on the Computer Science programme [1-3]. This paper analyses the impact of PBL and PAL on student experience across different areas of competence development, evaluates the challenges facing students and academic staff and advises how its findings can be implemented in teaching students across the Faculty of Science and Technology at Lancaster University. There is a substantial body of literature on the PAL [e.g. 4] and PBL methodology [e.g. 5, 6]. PAL is an example of a student-to student support scheme grounded in collaborative learning. PAL is aimed to improve student performance and develop a range of study skills through creating an informal environment for learning. At the same time PBL encourages deeper learning via meaning construction and connecting ideas. It stimulates collaborative knowledge building process among participants and develops self-directed learning. The introduction of both methods into the educational process at the same has a broad potential. The carried out research had the following objectives: • to facilitate the development of a range of competences through implementing PAL and PBL. • to evaluate the quality of student experience by analysing the impact of these methods on students’ competence development; • to analyse the challenges university teachers face in implementing innovative approaches to competence development. • to identify the opportunities for fostering effective teaching and learning methods to enhance student employability prospects.