Surge in UK Graduates on Benefits Raises Concerns for Economy

The number of UK graduates relying on welfare support has surged dramatically, with many citing health issues as a barrier to employment. According to research from the Centre for Social Justice (CSJ), approximately 707,000 degree holders were not employed and claiming at least one benefit at the end of 2022. This represents a rise of about 46 percent compared to pre-pandemic levels in 2019.

Ill health is a significant factor contributing to this trend. The report indicates that the number of graduates unable to work due to sickness or disability has increased from 117,000 in 2019 to 240,000 in 2025, more than doubling in just six years. Currently, around one third of unemployed graduates cite health as the primary obstacle to finding work.

Concerns have also been raised about the disconnect between the qualifications obtained by graduates and the skills demanded by employers. The CSJ argues that certain university courses do not provide adequate returns on investment, leaving young people with substantial debts and limited salary prospects. The analysis highlights that a growing number of graduates are moving directly from university to claiming sickness benefits. Among those under 30 receiving support such as Universal Credit, over 80 percent attribute their situation to health-related issues.

Andrew Griffith, the shadow business secretary, noted that many young graduates are eager to enter the workforce but face intense competition. He highlighted instances of graduates submitting numerous job applications without receiving any responses, exacerbating mental health challenges due to repeated rejection.

In response to these findings, Conservative officials argue that increases in the minimum wage and National Insurance contributions have negatively impacted entry-level hiring. Recruitment specialist Jo Powell indicated that businesses are now hesitant to hire juniors or apprentices due to rising wage costs, and many smaller firms are scaling back on recruitment entirely.

This situation unfolds against a concerning backdrop, with nearly one million individuals aged 16 to 24 currently out of work, education, or training. Analysts warn of the potential for long-term dependence on state support. Furthermore, vocational training pathways seem to be losing traction, with the CSJ reporting a 40 percent decline in apprenticeship numbers among school and college leavers in recent years.

Interestingly, higher-level apprentices often secure better salaries than many graduates. Those completing a level four apprenticeship—akin to the first year of university combined with practical training—earn nearly £12,500 more five years later than graduates from low-value degree programmes. Even lower-level apprenticeships often provide pay that meets or exceeds that of graduates from less competitive degrees.

The CSJ also noted a significant shift in wage policy affecting graduate earnings. Historically, graduates earned approximately two and a half times the minimum wage; by 2023, that ratio has narrowed to about 1.6 times.

Daniel Lilley from the CSJ emphasized the need for policymakers to reassess the prevailing view that higher education should be the default choice for students. He argued that technical training has long been undervalued, resulting in a shortage of workers equipped with practical skills. Government statistics reveal that for every three young people who opt for university, only one chooses vocational education. This contrasts sharply with countries like Germany, where the division is more balanced, often linked to higher productivity rates.

Strengthening technical education could enhance job prospects for young people while addressing workforce shortages in critical sectors. In response to these challenges, a government spokesperson stated that ministers are focused on assisting young people in finding work. They highlighted the new Jobs Guarantee scheme, which offers paid placements with employers like E.ON, JD Sports, Tesco, and TUI. Additionally, £1.5 billion is being allocated to training and apprenticeship initiatives. The government has also appointed former health secretary Alan Milburn to lead a review addressing barriers faced by younger workers, which they aim to tackle promptly.