Key Takeaways:
- UK youth NEET count hit 1,012,000 in Q1 2026, the highest since 2011
- Milburn report estimates £125 billion annual cost to the economy
- Six in 10 NEET youth have never worked; 42% cite mental health conditions
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UK youth NEET count tops 1 million as Milburn warns of £125B cost
More than 1 million British 16- to 24-year-olds are now not in employment, education or training, a crisis that former Health Secretary Alan Milburn estimates costs the UK economy £125 billion a year.
The number of young people classified as NEET — not in employment, education or training — rose to 1,012,000 in the first quarter of 2026, up 89,000 from a year earlier and 55,000 from the prior three months, the Office for National Statistics said. That represents 13.5% of all 16- to 24-year-olds, the highest share since the aftermath of the 2008 financial crisis.
"The problem is that for too many young people, opportunities are not growing, they're shrinking," Milburn wrote in his interim report, commissioned by the government and released alongside the ONS data. The former Labour health secretary described the figures as a "warning" that without direct government intervention the total could reach 1.25 million by the end of the decade.
The report paints a stark picture of structural disconnection. Six in 10 NEET young people have never held a job, up by a third compared with 2005. The proportion citing a work-limiting health condition has increased 70% over the past decade, while those reporting a mental health condition has almost doubled to more than four in 10. Nearly 60% of idle youth are not even looking for work, and roughly seven in 10 who claimed a disability benefit remain on it a decade later.
The fiscal arithmetic is deteriorating rapidly. The UK spent £52 billion on working-age health-related benefits in the 2024-2025 fiscal year, up from £36 billion five years earlier, according to the Institute for Fiscal Studies. Milburn's report estimates the direct cost of benefit spending on NEETs at £3.2 billion annually, with an additional £2.7 billion in estimated wellbeing losses and £200 million in increased health spending. The broader £125 billion annual figure includes lost economic output and foregone tax revenue.
The supply side of the labor market has shifted against young entrants. Entry-level jobs have declined by roughly 1.6 million over the past two decades, while apprenticeship starts among young people have fallen 35% since 2017. Rising employer payroll taxes and a minimum wage that has increased as much as 84% since 2019 for some younger cohorts are pricing inexperienced workers out of the market, according to the WSJ editorial board's analysis of the report.
The UK now has the second-highest youth NEET rate in Europe after Romania — three times the rate in the Netherlands and double that of Ireland. Milburn challenged the notion that young people are work-shy, noting that 83% of NEET youth surveyed said they were actively looking for work. The education system bears part of the blame, he wrote, focusing too much on exam results and not enough on student destinations. Children who are not school-ready at ages four or five are nearly three times as likely to be NEET at ages 16 to 17.
The government has responded with what Work and Pensions Secretary Pat McFadden called "the biggest youth employment reforms in a generation," including a Youth Jobs Grant for businesses starting next month, more apprenticeships and subsidized employment. Chancellor Rachel Reeves pledged £820 million over three years in her November 2025 Budget to provide 18- to 21-year-olds with access to training or paid work placements. Those who refuse the offer could lose their benefits.
Milburn's full findings and recommendations are due in the autumn. The interim report notes that for every £25 the government spends on youth benefits, it spends only £1 on schemes to get young people back into work — a ratio he described as unsustainable. With the lifetime loss per NEET young person approaching £300,000, the cost of inaction compounds with each quarter the number stays above 1 million.
This article is for informational purposes only and does not constitute investment advice.
[1] Britain’s Lost Generation of Workers - WSJ[2] Growing youth inactivity 'most significant challenge' facing the country, warns review chief[3] The key takeaways from Alan Milburn’s review into youth unemployment[4] Mr Milburn’s historic NEET review deserves cross-party support[5] What does Neet stand for and why does the UK have so many?
