Picture this: you’re 21, fresh out of university with a decent degree, full of ideas and energy, but month after month your inbox stays silent. Applications sent, interviews that never materialise, and the savings are dwindling. For far too many young people in Britain right now, this isn’t just a bad dream—it’s daily life. I’ve spoken to several in this exact position, and the frustration is palpable. Something has shifted in the jobs market, and young workers are paying the heaviest price.
The latest figures paint a sobering picture. Official data shows the unemployment rate for 16- to 24-year-olds climbing to around 16% in late 2025, a level not seen in more than ten years outside the pandemic spike. Meanwhile, the number of young people not in education, employment or training—often called NEET—hovered just shy of a million. That’s not a statistic; that’s almost a million futures put on hold. And unlike previous downturns, this one feels different—more stubborn, more structural.
Why Young People Are Bearing the Brunt
Labour markets have always been tougher for those just starting out. Employers hesitate to take risks on unproven talent during uncertain times, and young workers often lack the experience that makes them “safe” hires. But what we’re seeing now goes beyond the usual cycle. A combination of slow growth, lingering inflation effects, and specific policy choices has created a perfect storm for entry-level opportunities.
Businesses face higher costs across the board. Energy bills, supply chain issues, and wage pressures have squeezed margins. When companies need to cut back on hiring, the first roles to go are often the junior positions—the very ones young people need to get their foot in the door. It’s a classic last-in, first-out scenario, but amplified by recent changes.
The Role of Wages and Taxes
One factor that keeps coming up in discussions with economists and business owners is the steady rise in the minimum wage, now known as the National Living Wage. Over the years, it has increased substantially in real terms, which many see as a positive step toward fair pay. Yet there’s growing evidence that the pace of those increases, especially for younger age groups, may have crossed a threshold where it discourages hiring at the entry level.
Recent comments from a senior figure at the Bank of England highlighted how the combination of higher employer national insurance contributions and the push to align youth wage rates with adult ones has hit young jobseekers particularly hard. It’s not that these policies are inherently wrong—fair pay matters—but the timing, against a backdrop of economic softness, seems to have created unintended consequences.
The changes around wages and employer taxes have had a particularly acute effect on young people trying to enter the workforce.
— Senior central bank economist
In my view, this isn’t about scrapping minimum wages or rolling back protections. It’s about recognising when good intentions meet harsh economic realities. Businesses, especially smaller ones, often cite these costs when explaining why they’re pausing recruitment or automating roles instead of hiring.
Technology and the Graduate Squeeze
Then there’s the rise of artificial intelligence and automation. Tools that handle routine tasks are becoming more capable every year, and companies are understandably eager to boost efficiency. But entry-level and graduate programmes—long the proving ground for new talent—are among the first to feel the pinch. Some firms have scaled back or cancelled these schemes entirely, leaving a whole cohort competing for fewer spots.
Graduates, in particular, are facing what some have called a “jobpocalypse.” Prestigious firms that once ran large intake programmes now hire far fewer. The competition is brutal, and many end up underemployed or taking roles well below their qualifications just to get started. It’s disheartening to see bright, capable people stuck in limbo.
- Recruitment freezes at major corporations
- Shift toward experienced hires only
- Increased use of AI for initial screening and tasks
- Longer job search times for new graduates
Perhaps the most worrying part is the long-term impact. Research consistently shows that early career setbacks can scar people for decades—lower lifetime earnings, poorer health outcomes, even reduced social mobility. When a generation struggles to gain a foothold, the effects ripple outward to families, communities, and the wider economy.
How Does the UK Compare Globally?
For much of the past two decades, Britain stood out as a relatively good place for young people to find work compared with many European neighbours. Lower youth unemployment drew thousands of Europeans to the UK. Now, that advantage has flipped. Recent international comparisons place the UK’s youth jobless rate above the EU average, while overall unemployment remains lower here than on the continent.
Germany, for instance, continues to boast much lower youth unemployment thanks to its strong apprenticeship system and vocational training pathways. In contrast, the UK’s approach has leaned heavily on academic routes, with less emphasis on structured work-based learning for non-university paths. That gap is showing up now in the statistics.
| Region | Youth Unemployment Rate (approx.) | Notes |
| UK | 15-16% | Highest in over a decade |
| EU Average | Around 15% | UK now higher |
| Germany | Significantly lower | Strong vocational system |
It’s a stark reminder that policy settings matter. Countries with robust training pipelines and incentives for employers to take on younger workers seem better equipped to weather economic headwinds.
The NEET Challenge and Long-Term Risks
Beyond the headline unemployment numbers, the NEET group deserves special attention. These are young people disconnected from both work and learning—often facing multiple barriers like mental health struggles, caring responsibilities, or simply a lack of local opportunities. The figure approaching one million is alarming, especially when you consider that many in this group have never held a proper job by their mid-20s.
Experts warn of “life-long socio-economic scarring.” Without early positive experiences in the workforce, individuals face higher risks of prolonged worklessness, poorer health, and dependence on benefits. Society pays a price too—lost tax revenue, higher welfare costs, and a less dynamic economy. Some have gone so far as to call this an existential risk, the potential for a “lost generation.”
If you haven’t had a job by your mid-20s, the long-term effects can trap you in a cycle of disadvantage.
— Former government adviser
I’ve always believed that work provides more than a paycheck—it builds confidence, structure, and social connections. When that pathway is blocked for so many, we risk deeper divisions and disillusionment.
What Could Turn Things Around?
Reversing this trend won’t be easy, but there are practical steps worth considering. Strengthening apprenticeships and vocational routes could offer alternatives to the university path, giving young people real skills and paid experience. Incentives for employers—perhaps targeted relief on payroll costs for young hires—might encourage more openings.
Addressing mental health support for jobseekers is crucial too; anxiety and low confidence often compound the problem. And on the policy side, a more nuanced approach to wage floors—balancing fairness with employability—could help without abandoning progress made over the years.
- Expand high-quality apprenticeships and work-based training
- Offer temporary payroll incentives for young hires
- Improve careers guidance and mental health resources
- Encourage flexible entry-level roles and on-the-job learning
- Monitor policy impacts closely to avoid unintended consequences
None of this is revolutionary, but consistent focus could make a real difference. The government has already launched reviews into youth inactivity, which is encouraging. The key will be turning analysis into action before more time is lost.
A Wake-Up Call for Everyone
This isn’t just a problem for the young—it’s a challenge for the whole country. A generation that can’t get started will struggle to contribute fully later, whether through taxes, innovation, or simply building stable lives. We’ve seen economic recoveries before, but this feels like something deeper, a shift in how opportunities are distributed.
In conversations with friends, family, and colleagues, the mood among parents is particularly grim. Many quietly worry their children face a tougher path than they did. That sentiment—parents doubting their kids will be better off—is new for many, and it’s worth pausing on. It signals a break in the social contract that progress is linear.
Yet I’m not ready to give up on optimism. Young people today are adaptable, creative, and often more aware of systemic issues than previous generations. With the right support and smarter policies, they can still thrive. The question is whether we’ll act decisively enough to make that possible.
The youth unemployment crisis in Britain isn’t inevitable. It’s the result of economic conditions meeting policy choices at a vulnerable moment. Understanding the causes is the first step; fixing them is the urgent task ahead. Because the cost of inaction isn’t just measured in percentages—it’s measured in lives delayed, dreams deferred, and potential left unrealised.
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