False starts

In 2025, the topic of NEETs (young people not in education, employment or training) is back in the headlines. Like in the late 2000s, the number of young people aged 16-24 who are NEET has risen to just short of a million. At the Labour Party Conference last month, the Chancellor announced a beefed-up ‘Youth Guarantee’ in response, offering persistently unemployed young people a guaranteed paid work placement. While this is a step in the right direction, it will only scratch the surface of the problem, reaching an estimated 43,000 young people – just one-in-twenty NEETs. A more expansive policy agenda is needed. In this briefing note, we set out the scale of the problem and document the key contributors to the rising number of NEETs, before moving on to policy measures that would genuinely shift the dial and help young people successfully transition into work or study.

There are almost a million NEETs aged 16-24, but only just over half of them are on benefits The official estimate of the number of 16-24-year-olds not in work or study is approaching one million, but there are good reasons to think that the Labour Force Survey (LFS) – the survey that sits behind the official NEETs estimate – might be wrong. LFS sample sizes remain well below their pre-pandemic levels, and only one-in-seven responses for 16-24-year-olds are from young people themselves, as opposed to proxy responses or imputed data. To validate the trends seen in the LFS, we examine administrative data sources covering young people’s employment and education and we find a similar trend. Reassuringly, our alternative estimate paints a similar picture: we estimate that the number of NEETs aged 16-24 has risen sharply (by 195,000) between 2022-23 and 2024- 25 to reach 940,000, reflecting falling labour-market participation and stalling education participation. So we can be fairly certain that the number of NEETs is high and rising, and this is an issue worthy of policy attention.

Reducing the number of NEETs would both improve young people’s living standards, and also increase the supply of labour to the economy. But policy makers are also interested for another reason: they hope to cut welfare spending by reducing the number of young people receiving out-of-work benefits. Indeed, discussions of this topic often treat NEETs and young benefit claimants as one and the same group. It’s true that out-of-work benefit claims among young people are on the rise: between 2019 and 2024, the number of 16-24-year-olds in the UK who are receiving Universal Credit (or equivalent) while out of work has risen from 430,000 to 530,000 – a rise of 24 per cent. But nearly half (44 per cent) of NEETs do not engage with the benefits system. This raises the tricky question of how to design effective policy to engage with NEETs who have no reason to be in contact with the state.

In 2025, three-fifths of NEETs are inactive – that is, not looking for work – rather than unemployed. This marks a big shift from to the early 2010s when unemployment was the main reason. Still, we should not forget that two-in-five NEETs are actively looking for work but unable to find it.

But the bigger shift over time has been in the composition of this inactive group. The proportion of NEETs who are inactive due to sickness or disability has more than doubled since 2005, reaching more than a quarter (28 per cent) of all NEETs in 2025, while the proportion who are inactive due to ‘other’ reasons (which includes those who are inactive for reasons other than health and caring responsibilities, including those who do not want or need employment) also rose sharply during the same period to reach 23 per cent of all NEETs in 2025.

At the same time, the share of young people inactive due to caring reasons dropped drastically, from 29 per cent of NEETs in 2005 to just 10 per cent in 2025. This was driven by young women, whose reasons for worklessness now look more like men’s. Indeed, while this big reduction in inactivity for caring reasons led to a welcome fall in women’s NEET rate during the 2010s, the picture now looks much less positive, with inactivity for health and ‘other’ reasons rising for both young men and women.

NEET trends differ by age as well as sex. The rise in economic inactivity due to ill health is mostly seen among 18-24-year-olds (rising from 12 per cent of all NEETs in this age group in 2005, to 30 per cent in 2025), while there has been only a moderate change among 16-17-year-olds. Meanwhile, those aged 16-17 are especially likely to be inactive for ‘other’ reasons – over the past three years this was the case for almost half (44 per cent) of 16-17-year-olds, compared to only a fifth of those aged 18-24. Notably, while all young people aged 16-17 in England must participate in education or training following the Rising Participation Age (RPA) legislation introduced in 2013, their NEET rates haven’t budged, fluctuating between 4 and 5 per cent in both 2013 and 2025.

And despite concern about graduate employment prospects, it is lower-qualified young people who continue to have the highest NEET rates. Rates for graduates aged 22-24 remain relatively low, and stable, at around 10 per cent throughout the past two decades. In contrast, NEET rates for 22-24-year-olds who hold a highest qualification that is at GCSE level or below have a NEET rate that is three-times as high (30 per cent).

Low qualifications aren’t the only thing that are holding NEETs back from entering work or study, though. NEETs are also more likely than other young people to experience both mental- and physical-health problems, and to report lower wellbeing. And NEETs are

increasingly detached from the labour market, as the share who have looked for paid work in the past month has been steadily decreasing over the past decade. At the same time, a growing proportion of have never had a paid job: 60 per cent of NEETs have never worked in 2025, up from 42 per cent in 2005. Altogether, this paints a worrying picture, of young people who face real, complex barriers to entering work or study.

The picture in 2025 is already bad, but it could get worse, for two reasons. First, there has been a rise in childhood risk factors for being NEET. Almost a quarter of children aged 11- 16 now have a probable mental-health disorder; one-in-five secondary school pupils are persistently absent from school; and one-in-six secondary school pupils receive special educational needs (SEN) support. Without a drastic improvement in the support available for young people with health problems and disability, and better pathways for those with low levels of qualifications, these trends indicate that our next generation of 16-24-yearolds will have a heightened NEET risk.

Second, recent Government policy may have worsened young people’s employment chances. This April’s increase in employer National Insurance contributions and bumper minimum wage rise meant that labour costs rose especially fast for young workers. This now looks to be having an impact on the labour market: employment and vacancies are falling most sharply in youth-heavy sectors of the economy. For example, while the total number of vacancies has fallen by 17 per cent over the last year, there were falls of 20 per cent in hospitality and 25 per cent in the arts, entertainment and recreation (both of which employ above-average shares of young people).

So what should policy makers do if they want to truly decrease the number of NEETs? The big differences between NEETs aged 16-17 and those aged 18-24 suggests that age-specific interventions will be necessary – we set out our policy recommendations below.

At age 16-17, young people reach a crossroads in the education system, leading many to disengage. Local authorities in England have a legal duty to track, contact and support NEETs aged 16-17 – but these duties are weakly monitored and enforced, with limited repercussions for failure. Despite these legal duties, NEET rates (including ‘not known’) for this age group vary substantially across England, from 1 per cent in Barnet and 1.6 per cent in Ealing, to 15.1 per cent in Northumberland and 21.5 per cent in Dudley.

To reduce NEET rates among 16-17-year-olds, policy makers should focus both on the retention of young people in education and on the re-engagement of those who fall out of the system. First, by strengthening tracking systems to help identify NEETs and those at risk earlier, to allow prompt re-engagement and to prevent young people from being NEET in the first place. Second, by creating a national ‘front door’ for young people, providing them a clear route back into education, employment or training. Third, by monitoring how long it takes local authorities to track, contact, and offer suitable provision to young people once they are identified as NEET, to improve accountability and drive more consistent performance across local areas. Finally, by drawing lessons from how duties placed on local authorities in adult social care are structured. In that system, an independent commission monitors local authority performance through monitoring, inspections and ratings, with enforcement actions being taken when services are at risk. Local authorities’ responsibilities to NEETs should be treated as just as important as those in adult social care.

This Government’s Youth Guarantee is a step in the right direction. It will offer young people (aged 18-21) access to training, an apprenticeship or support to find work, and those who are long-term unemployed and claiming benefits will be offered a guaranteed work placement. This work guarantee is welcome, since we know that young people are far more likely to escape being NEET by moving into work than into study: 78 per cent of those who escape being NEET do so by moving into work.

But we think the Government should be more ambitious. First, it should widen the Youth Guarantee to 22-24-year-olds. There are just as many NEETs aged 22-24 as aged 18-21 and their composition is similar, so any credible policy response aimed at reducing NEET rates should consider 22-24-year-olds just as much as 18-21-year-olds. Second, it should offer equal support through the Youth Guarantee to all young people, regardless of whether they are claiming out-of-work benefits. This is spending money now to save later, given that the scarring impact that spells of worklessness can have on young people’s futures. DWP should make the most of having secured a sizeable increase in funding for employment support over the rest of the decade (an extra £300 million was announced in June this year, as part of an unsuccessful attempt to sweeten the Government’s ill-fated PIP cuts) and prioritise spending on young people aged 18-24.

The Government should also re-think its proposed changes to health benefits for young people aged under 22 and instead undertake more ambitious changes to the benefits system that will actually reduce NEET numbers. Barring young people under 22 from receiving the health element of UC would be the wrong policy change focused on the wrong age group, and is unlikely to make a substantial dent to either NEET numbers or benefit spending: there are 100,000 young people aged 16-21 claiming UC-Health, representing just one-in-ten NEETs; meanwhile, the 120,000 22-24-year-olds claiming UC-Health, and the 230,000 young people aged 16-24 who are unemployed and claiming UC, would be unaffected by this change. Instead of undertaking this arbitrary age-based restriction, the Government should have a positive ambition to make UC work better for all young people by increasing the quality and frequency of Work Capability Assessments for young people on UC-Health and increasing the work search requirements placed on young jobseekers.

Finally, the Government should proceed carefully with measures that add to the costs of employing younger workers. The pattern of job losses in lower-paying sectors, where young workers are concentrated, is consistent with an adverse impact from bumper increases to minimum wage rates, combined with the increase to Employer National Insurance Contributions (NICs), over the past year. Our view is that this Government’s should not proceed with its commitment to abolish so-called ‘discriminatory’ youth rates, and that sharp rises would be ill-advised in the current economic environment and risk making it even harder for young people to get a foot into the labour market. We would encourage the Government to progress slowly and carefully, placing weight on these potential disemployment effects.

The upcoming Budget looks set to include more details about – and funding for – the Government’s Youth Guarantee. This policy attention on NEETs is welcome: close to a million young people are not in work or study, and they deserve more support to both improve their living standards now and boost their career prospects in the future. But it is important that the Youth Guarantee is not narrowly focused on 18-21-year-olds, or just on those NEETs who are claiming benefits. Instead, a wider NEETs policy is needed: one that properly enforces education or training participation among 16-17-year-olds, and offers all 18-24-year-olds, even those who are not claiming benefits, the support they need to move into good-quality work or study.