Almost one million young people in the UK are currently not in education, employment or training, according to new data that paints a troubling picture of the nation’s job market.
As unemployment rises to a four-year high and business hiring freezes spread, experts are warning that Britain is facing a new wave of economic and social challenges — with young people hit the hardest.
Youth joblessness and ill-health on the rise
Official figures show that the UK jobless rate has climbed to 4.8%, up from 4.1% a year ago, with around 100,000 jobs lost from company payrolls over the past 12 months. Behind the headline numbers, however, lie two worrying trends: a sharp rise in youth unemployment and a surge in work-limiting health problems.
More than 9 million working-age adults are now classed as “economically inactive” — neither in work nor looking for a job. Of these, nearly 3 million are unable to work due to long-term ill-health, one of the highest figures on record.
Health problems among young adults are also rising rapidly. Between 2015 and 2024, the number of people aged 16–34 with work-limiting conditions increased by 77%, compared with a 32% rise among 50–64-year-olds.
Government under pressure to act
The government is expected to respond this week to the crisis with the publication of the Keep Britain Working review, led by Sir Charlie Mayfield, the former chair of John Lewis.
Mayfield is urging both ministers and businesses to take stronger action to help people with disabilities and mental health challenges stay in work.
“This issue is huge – not just for individuals but for our entire economy,” Mayfield said. “We’re losing valuable skills and productive capacity that the country simply can’t afford to waste.”
The Resolution Foundation found that more than a quarter of 16–24-year-olds not in work or training cite disability or ill-health as the main reason. The TUC also revealed that unemployment among people with disabilities has risen to its highest level since before the pandemic, more than double the rate for non-disabled people.
Calls for a new youth jobs guarantee
Labour’s upcoming budget is expected to include Chancellor Rachel Reeves’s “youth guarantee”, aimed at tackling youth unemployment through investment in skills, apprenticeships and further education.
The TUC has warned Reeves not to pursue benefit cuts for disabled people and instead reform the Access to Work scheme and increase statutory sick pay.
Analysts say that getting more young people into work could deliver a significant boost to the economy. The Resolution Foundation estimates that if the UK matched the lowest rate of youth unemployment among OECD countries, the economy could gain £69bn.
Businesses feel the strain – but can’t opt out
Many companies argue that rising taxes, higher wages and a fragile economy limit their ability to do more. Job vacancies have fallen most sharply in retail, hospitality and leisure — the very sectors where many young people and those with health conditions typically find work.
However, Mayfield believes investing in employee health and wellbeing is not just socially responsible but economically smart.
“It shouldn’t be seen as a burden,” he said. “It’s something that’s necessary and delivers long-term returns for employers. We’re all connected — business can’t just sit this one out.”
Without action, experts warn Britain risks entrenching a “lost generation” of young people excluded from work, training and opportunity.
