A review warns the UK risks a “lost generation” as youth joblessness and inactivity rise, with annual costs estimated at £125bn.
The UK faces a growing youth employment crisis that could cost the country an estimated £125bn a year, according to an interim review that warns 16- to 24-year-olds are being hit by a “perfect storm” of pressures.
The review, led by former minister Alan Milburn, says the education, health and welfare systems are no longer adequately preparing young people for adult life. It comes as official figures show 1,012,000 young people were not in education, employment or training between January and March 2026 — 13.5% of all young people in the UK and the highest level in more than 12 years.
Milburn warned that the country was “at risk of a lost generation,” with one in six young people projected to be outside work, education or training by 2031 unless urgent action is taken. His interim report does not set out recommendations; those are expected in a final report later.
The review estimates the annual cost of young people not in work, education or training at £125bn, including lost economic potential, long-term “scarring” that reduces future employment prospects, lower tax receipts and higher health and benefits spending. The total is described as greater than annual education spending in England.
The findings challenge the idea that the rise is driven by young people choosing not to work. The report says six in 10 young people in the group have never had a job, up from four in 10 in 2005, while 84% of those surveyed said they wanted work or training.
Milburn said there was no single cause. The report points to the effects of the Covid pandemic, the current jobs market, smartphones and rising mental health problems, including anxiety and ADHD, while saying there is no evidence linking migration to youth joblessness.
The labour market itself has also become less accessible for first-time workers. The report says mid- and lower-skilled jobs have fallen by about 1.6 million over the past 20 years, while hospitality vacancies have halved in the past four years, according to ONS data cited in the report.
Work and Pensions Secretary Pat McFadden said the review laid “bare the scale of the challenge” and said the government was bringing forward youth employment reforms intended to create 500,000 opportunities, including a Youth Jobs Grant for businesses, more apprenticeships and subsidised employment.
Shadow work and pensions secretary Helen Whately criticised the government’s approach, claiming Labour had made it harder for young people to take their first step into work.
The next test will be whether Milburn’s final report turns the warning into a set of measures capable of reaching young people who want work or training but are struggling to get a first foothold.
Comments (0)