Young people out of work or education near one million, ONS data show

Office for National Statistics data released today show roughly 980,000 young people aged 16 to 24 in the UK were neither in employment nor in education or training, edging the cohort close to one million and intensifying immediate pressure on employers and public services. The figure represents a rise from last year and marks the weakest start to careers since the aftermath of the pandemic for this age group.

The ONS count, derived from the Labour Force Survey, signals a widening gap between employer demand for entry-level labour and the supply of young workers ready to take up jobs or apprenticeships. Youth disengagement has risen even as headline unemployment for the broader population has moderated, leaving employers in sectors that rely on early-career hires, hospitality, retail, care and manufacturing, with thinner candidate pools and higher recruitment frictions.

Economically, a near‑million cohort out of work or education creates two immediate strains. First, public finances face higher near-term cost from increased spending on benefits, training and local support, and lower receipts from income tax and national insurance. Second, firms contend with weaker labour supply at the low-skill and early-career rungs of their workforce, a dynamic that can translate into higher starting wages, slower expansion plans or greater investment in automation for routine tasks. Labour market consultants report firms are increasingly competing on flexible hours and on-the-job training to attract younger applicants.

The problem is concentrated at the start of careers. Participation rates for people aged 16 to 24 have fallen, while the proportion registered as neither in employment nor in education or training has climbed, meaning more young people risk scarring, persistent lower earnings and weaker attachment to the labour market over their life cycle. Research on past episodes of elevated youth unemployment shows even short periods of disengagement can reduce lifetime earnings and cushion against future shocks, a cost that is borne both by individuals and the economy's long-term productivity.

Policy responses remain politically and technically challenging. Targeted apprenticeships, scaled-up wage subsidies for entry-level hires and localized job-creation partnerships between councils and employers are among the measures economists say could help restore early-career pathways. Skills provision also matters: the mismatch between the skills employers need and what entrants offer has widened, pointing to the importance of employer-led training and clearer transitions from education into work.

Regional disparities matter for policy design. Areas with lower economic growth and fewer vacancies are disproportionately contributing to the rise in young people out of work or education, suggesting national measures will need local tailoring. Without faster improvement in youth labour market attachment, the long-run economic consequences include a weaker productive workforce and greater pressure on housing, social mobility and aggregate demand.

For now the immediate implications are tangible: thousands of young people are facing delayed careers, employers report difficulty filling entry-level roles, and taxpayers confront the costs of higher benefit and retraining needs. How quickly policymakers and firms can close the gap between opportunity and readiness will determine whether this cohort becomes an economic drag or a revitalized labour supply.