A stark warning has been issued regarding the growing number of young people in the United Kingdom who are not engaged in work, education, or training (Neets). A comprehensive report estimates that this situation is costing the UK economy a staggering £125 billion each year and highlights the risk of a "lost generation" unless urgent action is taken. The current education, health, and welfare systems are deemed inadequate in preparing young individuals for adult life, according to the report's author, former minister Alan Milburn.
Milburn expressed grave concern, stating, "We are at risk of a lost generation." He projected that by 2031, one in every six individuals aged 16 to 24 could be out of work, education, or training if immediate measures are not implemented. "The problem is that for too many young people, opportunities are not growing, they're shrinking," Milburn elaborated, underscoring a critical decline in prospects for this demographic.
These findings emerge amidst escalating worries about the challenges young people face in securing employment within the UK. Official statistics released recently revealed that over one million young people were not in education, employment, or training, marking the highest figure in more than a decade. Milburn conveyed the palpable anxiety surrounding this issue, telling the BBC, "This is a visceral feeling in the country…it's bordering on a fear in the country among parents and grandparents that this generation is going to be a lost generation."
Milburn was commissioned to investigate the underlying reasons for the high prevalence of Neets. While the interim report does not offer specific solutions, a final report is expected to detail potential remedies. The current review, corroborated by other statistical data, paints a bleak picture for the UK's youth. It indicates that six out of ten Neets have never held a job, a significant increase from 2005 when the figure was four in ten. Despite this, the report notes that 84% of surveyed Neet young people express a desire for employment or training.
According to the Office for National Statistics (ONS), between January and March 2026, there were 1,012,000 young people classified as Neet, constituting 13.5% of the total youth population in the UK. Furthermore, the number of individuals deemed "economically inactive"—meaning they are neither working nor actively seeking employment—has risen to approximately 613,000. The count of young people classified as unemployed, though actively seeking work, was estimated at 400,000.
The report also highlights a significant contraction in entry-level job opportunities. The number of mid- and lower-skilled positions in the economy has reportedly decreased by around 1.6 million over the last two decades. Data from the ONS further reveals that vacancies in the hospitality sector have been cut in half over the past four years alone. Milburn's report estimates the "cumulative cost" to the UK of nearly one million Neet young people at £125 billion annually. This figure encompasses £38 billion per year in lost economic potential and an additional £63 billion annually attributed to economic "scarring," which reflects a reduced likelihood of future employment.
Additional financial implications include losses in tax revenue and increased expenditure on health and benefits. The total estimated annual cost significantly surpasses the entire annual education budget for England. Work and Pensions Secretary Pat McFadden acknowledged the gravity of the situation, stating that the review "laid bare the scale of the challenge and the root causes of youth unemployment we now need to confront." He indicated that the government is already initiating substantial youth employment reforms, aiming to generate 500,000 opportunities through initiatives like a Youth Jobs Grant for businesses, expanded apprenticeship programs, and subsidized employment schemes.
However, shadow work and pensions secretary Helen Whately criticized the government's approach, asserting that current policies have inadvertently made it more difficult for young people to enter the workforce. The report identifies multiple contributing factors to this crisis, including the impact of the Covid-19 pandemic, the proliferation of smartphones, and the current state of the job market. Milburn emphasized that there is no single cause, refuting any link between migration and youth joblessness.
"It supports something harder to accept: that the institutions we built to support young people into adulthood are no longer fit for that purpose, and that the country has known this for some time," Milburn stated. He challenged the perception that young people are unwilling to work, arguing that they are actively seeking opportunities. "You hear some call them work shy, snowflakes, soft – this is a generation that is trying, putting in hundreds of applications a month," he told the BBC. "They hear nothing back, it's the silence that kills. The old contract in society was always you put in effort and got a reward, each generation would do better than the last – this contract has been broken for this generation."
Milburn also pointed to changes in mental health as a factor affecting the supply of young labor. He noted a sharp increase in Neets reporting anxiety and ADHD as significant barriers to employment or training. Systemic issues, he suggested, are contributing to a phenomenon he termed the "bedroom generation," individuals who spend excessive time online and remain isolated. One young person shared their experience of the Covid lockdown, explaining how the lack of in-person interaction hindered the development of crucial social skills like maintaining eye contact and using non-verbal communication, as interactions were primarily screen-based.
Spear Zaynah, 24, who has experienced physical health issues, has been unemployed since completing college. Over the past year, she submitted more than 200 job applications without receiving any responses. "Getting a job is very hard because with my issues, I haven't got that much experience, I've never worked before," she explained, feeling that her health condition limits her job prospects. She plans to undertake volunteer work to enhance her CV. Luke, a product design graduate, reported applying for over 400 positions and securing only one interview for a cleaner role, which he did not obtain. "It's humiliating," the 23-year-old expressed. "You think 'okay I've got all the knowledge, I've got all the skills, all I'm waiting for is a job to put it in practice'. "It makes you depressed, especially the amount of rejections."
In contrast, Rocky, who was unemployed for a year before starting as a waiter at Nando's, has since progressed to become an assistant manager. "I'm 23 years old and I'm a manager at Nando's," he shared. "I feel happy with myself. I can look back and tell my doubters that I made it." Milburn observed that the UK's youth unemployment situation is more severe compared to other nations, with figures being three times higher than in the Netherlands and double that of Ireland.
High street retailers and hospitality businesses, such as restaurants and pubs, typically provide crucial first work experiences for young individuals. Some employers have cited increased labor costs, including higher minimum wages and rising employer National Insurance contributions, as challenges in hiring young people. The boss of Next, Lord Simon Wolfson, noted that the company, which previously received about ten applications per shop vacancy, now sees nineteen. David Fox, founder of the Tampopo restaurant chain, indicated that inflation and employment costs, such as National Insurance increases and higher minimum wages, are hindering his ability to hire more young staff.
This multifaceted crisis, characterized by shrinking opportunities and systemic failures, poses a significant economic and social challenge for the United Kingdom. The report underscores the urgent need for comprehensive reforms to ensure that young people are adequately prepared for and integrated into the workforce, thereby preventing the long-term consequences of a "lost generation."
