Jobs for young people in the UK are disappearing

The UK’s youth jobs (16 to 24-year-olds) declining market performance has meant it now ranks 27 out of the 38 OECD (Organisation for Economic Co-operation and Development), new data from PwC shows.

The group tracked youth employment outcomes across OECD countries, looking at metrics including labour market participation, quality of work and skills acquisition. UK Youth unemployment rate now stands at 15% based on the latest data, up from 11% three years ago, recording the sharpest increase in the G7.

The findings come as the Government intensifies action to tackle rising levels of NEETS, including increased funding in the recent Budget to guarantee work placements for 18-21 year olds, and an independent investigation into tackling youth inactivity.

Youth inactivity at decade high

The PwC Youth Employment Index 2025 presents several recent lows in UK youth employment metrics – including the worst economic inactivity levels in a decade and one in eight now classed as NEET. Around three million young people are now economically inactive, a third (34%) higher than in 2005, representing the highest proportion of any working-age group.

The report finds several main drivers to the UK’s deteriorating performance in the Index:

Cyclical pressures: The overall UK labour market has cooled. UK youth unemployment is now almost three percentage points higher than the OECD average, suggesting young workers are disproportionately impacted by the softening jobs market relative to older workers. While adult workers have seen consistent employment growth since 2012, employment among young workers in 2025 remain below 2019 levels. The youth-to-adult unemployment ratio is now at its highest level on record and the highest in the OECD.
Graduate employment lull: The overall share of recent graduates in ‘graduate jobs’ has fallen to its lowest level since 2014, indicating the labour market’s capacity to absorb new entrants is weakening. The number of graduates entering the jobs market continues to climb with 2024 marking the first year over one million students graduated from university.
Rising economic inactivity: A growing share of young people are becoming economically inactive, driven by a larger pool of students and an increase in long-term sickness. Three-times as many young people are inactive due to long-term sickness than 2005, with one quarter (26%) of young people reporting common mental health conditions in 2024, compared to 19% in 2014.

Reversing the trend

The government has recently outlined a multi-faceted approach to tackling youth economic inactivity, including the Youth Guarantee, which ensures paid work placements for eligible out of work 18 to 21-year-olds, and free apprenticeship training for under-25s working at SMEs. An independent investigation into rising youth economic inactivity will also conclude in Spring 2026.

PwC’s analysis highlights significant economic benefit from reducing NEET rates. Using Northern Ireland, the best performing region for reducing young people inactivity with only 9% of 16 to 24 years olds classed as NEET, as the benchmark, analysis showed substantial economic benefits.

If regional disparities were reduced and worst performing regions such as London (15% NEET rate) and Scotland (16% NEET rate) progressed NEET levels towards Northern Ireland, it would boost GDP by around £13 billion, and up to £26 billion if the gap was fully closed, the group said.

“The government is rightly focused on tackling the opportunity crisis facing young people. A generation’s future is at risk – as is the UK’s productivity and prosperity. Given the UK’s sliding performance on youth employment, a serious gear change is needed,” said Marco Amitrano, Senior Partner at PwC UK.

He noted that this will only come with joined up thinking across education, health and the economy.

“Above all, progress depends on growth – growth to support investment in skills, health, and job creation. The potential greater stability on the tax front following last week’s Budget should help, but we also need a tangible programme for growth that business can get behind. No business wants to see young talent go to waste, which means we can generate a lot of momentum behind the ambition.”