The government has finally put a number on AI’s reach into British work
Key Points
- A new Skills England report finds 70% of UK workers are in occupations containing tasks that artificial intelligence could perform or enhance.
- The report says AI could lift UK productivity growth by 0.4 to 1.3 percentage points over the next decade.
- Graduate online job adverts fell 45% in 2025 against the previous year, though the report stops short of blaming AI.
- Finance, information and communication, and professional and scientific roles show the highest AI exposure.
- The government is expanding free AI training through AI Skills Boost, aiming to upskill 10 million workers by 2030.
Skills England has reported that 70% of UK workers are in occupations containing tasks that AI could perform or enhance, in its annual skills report published on Monday (1 June).
The figure originates from research by Cazzaniga and others, cited in the Department for Science, Innovation and Technology assessment of AI capabilities and the UK labour market.
Skills England, the government’s national agency for skills, used it to frame AI as one of five major challenges facing the workforce in 2026. The agency operates within the Department for Work and Pensions and is chaired by Phil Smith.
The report states that AI is reshaping the skills required across many jobs, sectors and regions. It says the UK has relatively high exposure to AI, meaning the technology either automates or augments occupational tasks across a large share of work.
The OECD estimates that AI could lift UK productivity growth by 0.4 to 1.3 percentage points over the next decade, helping to narrow a long standing productivity gap with other developed nations.
Exposure to AI varies sharply by sector. Finance and insurance, information and communication, and professional, scientific and technical roles record the highest exposure, where work centres on cognitive, clerical and data driven activities.
Sectors built around physical work or human interaction, including construction and hospitality, remain the least exposed.
The report also addresses growing concern about entry-level and graduate hiring. Research by Klein Teeselink found that AI-exposed firms reduced total employment by 4.5% and junior positions by 5.8%, and that highly exposed firms were 16.3 percentage points less likely to post vacancies at all.
Adzuna’s job market data shows graduate online job adverts fell 45% in 2025 compared with the previous year, while entry level adverts dropped 25%.
Skills England declines to attribute the graduate slowdown to AI. The report notes conflicting evidence, including analysis by Burn-Murdoch and O’Connor that found no clear link, and points to a gradual decline in graduate vacancies since 2022.
The agency concludes that distinguishing the effect of AI from post-Covid adjustments and the wider economic cycle remains difficult, and that it is too early to say what impact AI is having on graduate jobs.
Demand for AI capabilities is rising quickly. The report cites PwC analysis showing that UK employer requirements for AI roles are evolving 66% faster than for other jobs, and that workers with AI skills command a 56% wage premium globally.
Most workers will need practical AI literacy rather than specialist technical skills, alongside human capabilities such as judgement, problem solving and collaboration.
In response, the government is expanding free AI training through AI Skills Boost, announced by the Department for Science, Innovation and Technology in January 2026.
The programme aims to upskill 10 million workers by 2030. Skills England launched a Level 4 AI and Automation Practitioner Apprenticeship in 2025 and has developed three apprenticeship units on AI leadership, each delivered over 30 hours.
