UK faces rising youth unemployment, over 1 million NEETs amid 'lost generation' warning

A government‑commissioned review led by former health minister Alan Milburn warns Britain is creating a “lost generation” as the number of 16‑ to 24‑year‑olds not in education, employment or training (NEET) has risen to just over 1 million – about 13.5 % of the age group – the highest level in more than a decade. The report projects the figure could reach 1.25 million, or one in six, by 2031 if current trends continue.

Key causes identified include a sharp decline in entry‑level jobs such as hospitality and weekend positions, a reduction in apprenticeships, higher employment costs, and a welfare system that “exacerbates inactivity”. Regional disparities are evident; London’s youth unemployment rate hit 22.5 % in 2025, far above the national 16 %, while Scotland’s NEET rate is around 3.9 % thanks to stronger apprenticeship pathways. The Netherlands maintains a NEET rate below 5 %.

Economic and social impacts are significant. Direct welfare costs for NEETs total £3.2 billion annually, while the economy could gain £38 billion if all NEETs were in full‑time work; foregone growth may cost up to £125 billion over lifetimes. Youth homelessness is rising, with 124 000 young people homeless or at risk in 2024‑25 – a 6 % increase – and a surge in youth homelessness in the north‑west. Mental‑health issues and disability benefits are also climbing among young people.

The review calls for a whole‑system response: expanded apprenticeships, demand‑side job creation, regional investment, and sustained funding for youth‑work organisations that connect young people with employers.