Young people in Britain are suffering a joblessness epidemic – and, so far, Labour is just making it worse | Larry Elliott

Youth unemployment is harming the mental health of a generation. A sluggish economy will only make things harder

U nemployment is bad for anyone, but really hard on the young. That’s because prolonged periods of worklessness in your late teens or early 20s scar you for life. As academic studies have shown, it can cause depression and affect earning potential for years to come. There is a clear link between poor mental health and being unemployed.

That’s why Alan Milburn’s probe into youth unemployment won’t be one of the government-commissioned reports that is quickly filed away and allowed to gather dust. It makes uncomfortable reading for ministers. The number of people aged 16 to 24 not in education, employment or training (Neets) is rising, and the costs of inactivity are increasing. Britain has a jobs problem, and it’s getting worse.

Milburn’s solutions to the issues he has identified in his interim report won’t be out until the autumn, but the trend is worrying. The overall unemployment rate across all age groups is 5%, but for those aged 16-24 it is 16.2% – up from 14.2% a year ago, and one of the highest in Europe .

In March 2026, there were more than one million Neets in the UK, an increase of 89,000 from a year previously. That’s partly due to an increase in the number of young people, but even accounting for demographics, the percentage of Neets aged 16 to 24 had risen from 12.5% in March 2025 to 13.5% in March of this year.

In recent years, the number of young people claiming inactivity-related benefits, where the claimant doesn’t have to look for work, has also been on the rise. Nearly one in nine 18 to 24-year-olds now fall into this category . There are reasons for this increase. As many people predicted would happen, closing schools and forcing young people to stay at home during the Covid lockdowns created an epidemic of mental health problems.

Milburn is calling for a system reset . It is hard to fault that conclusion when for every £25 spent keeping young people on benefits, only £1 is spent on employment schemes that would help them find work. The benefits system has cliff edges that mean disabled young people are deterred from looking for a job for fear of being worse off.

Yet the notion that young people are gaming welfare is for the birds. As the economist Michael Burke has pointed out , 46% of Neets don’t claim benefits, while a further 20% are so unwell that they receive state support without any requirement to look for work. Of the remainder, many of those on out-of-work benefits would like to find a job, but lack the hands-on support to do so. Burke also makes the point that while the percentage of Neets in the UK has been rising recently, it remains below its long-term average.