Youth Unemployment Crisis: How Health Issues Are Keeping a Million Young Brits Out of Work

The Troubling State of the UK Jobs Market

Almost a million young people are not in education, employment, or training. Employers are freezing their hiring plans, and unemployment has hit a four-year high at 4.8%. The outlook is worsening, with about 100,000 jobs lost from company payrolls in the past year, and more than 9 million working-age adults economically inactive.

Underlying Trends: Youth Unemployment and Ill Health

Beneath the headline statistics, two troubling trends stand out: a dramatic increase in youth unemployment and rising levels of ill health. Sir Charlie Mayfield, former chair of John Lewis, is set to publish his Keep Britain Working review, urging the government and businesses to tackle worklessness, especially for those with disabilities or health conditions.

Mayfield emphasizes that businesses must do more to support people with work-limiting health conditions, with a focus on mental health support. He states, "This issue is a nasty one. There is a tremendous opportunity to do better."

Economic Inactivity and Health Impacts

One in five working-age adults are economically inactive, with nearly 3 million citing long-term ill health as the main reason—a figure near its highest on record. The increase is most pronounced among young people: between 2015 and 2024, the number of 16- to 34-year-olds with work-limiting conditions rose by 1.2 million (77%), compared to 900,000 (32%) for 50- to 64-year-olds.

According to the Resolution Foundation, over a quarter of 16- to 24-year-olds not in education, employment, or training (Neet) are inactive due to disability and ill-health, a rate that has more than doubled since 2005. The TUC reports that unemployment for people with disabilities is at its highest since before the Covid pandemic, more than double the rate for non-disabled people.

Calls for Government and Business Action

Paul Nowak of the TUC believes Labour has an opportunity to address this after years of Tory neglect, stating, "Our employment system is failing disabled people. We can’t carry on as we are." The big question is how to respond, with limited room for manoeuvre in public finances and business capacity.

Chancellor Rachel Reeves is expected to detail a "youth guarantee" in the upcoming budget, focusing on investment in skills, training, apprenticeships, and further education. The TUC warns against cutting disability benefits and advocates for reforming the Access to Work scheme and raising statutory sick pay.

Economic Benefits and Business Pressures

Getting more people into work could reduce benefit spending and boost the economy; matching the lowest Neet rate among OECD countries could deliver a £69 billion boost. However, businesses, facing tax rises like the £25 billion increase in employer national insurance contributions, higher living wages, and economic headwinds, are pushing back against additional roles.

Job vacancies have fallen most in sectors like retail, leisure, and hospitality, which are also key entry points for young people and those with health issues. Refusing to help would be short-termist, depriving businesses of employees and customers, worsening unemployment, and harming the economy.

Mayfield argues, "Investment in employee health and wellbeing should not be a burden. It actually should be something that is both increasingly necessary and also highly returning for employers." Businesses cannot opt out; in a connected society, collective action is essential to address this crisis.