Britain eyes welfare cuts to tackle surge in youth unemployment

Britain is preparing to address a sharp youth employment problem: 981,000 people aged 16-24 were not working, studying or training in the second quarter of 2026, or 13% of that age group. Youth unemployment stood at 15.6%, far above the 3.4% rate for older workers. A forthcoming report by former minister Alan Milburn is expected to recommend expanding back-to-work programmes, partly by restricting health-related benefits for under-25s. Proposals include excluding them from ill-health supplements to unemployment benefits and moving them onto a more limited form of disability support. Milburn argues that public spending should shift from benefits towards employment assistance, but acknowledges that some people would receive less financial support. The plan faces resistance from Labour lawmakers, who previously blocked welfare cuts, and is unlikely to quickly reduce the £8 billion annual benefits bill for young people.

The case for stronger employment support is illustrated by Faisa Omar, who found work in green energy after a targeted 10-week course, despite having applied for more than 500 jobs. One charity reports that about 70% of its trainees find work within a year, suggesting that programmes linked closely to employers’ vacancies can help. Barriers include limited qualifications and health conditions, while employers say artificial intelligence, higher wages and payroll costs are reducing entry-level hiring. Britain also provides less structured support than some European peers: Dutch municipalities may contact unemployed young people directly and offer help such as childcare or mental health services, while vocational placements and part-time work are more common. However, Britain’s benefits are not unusually generous by European standards, and the causes of rising youth inactivity may also include economic shifts and technology.