The Chancellor of the Exchequer has recently set aside the relatively modest sum of £820 million in her Autumn 2025 Budget to fully subsidise six-month minimum-wage work placements, to a maximum of 25 hours a week, for 18- to 21-year-olds on Universal Credit and “not earning or learning” for over 18 months. This ‘Youth Guarantee’ is part of the UK Government’s strategy to address the bigger problem of NEET (Not in Education, Employment, or Training), affecting young British people between the ages of 16 and 24. The new money is intended to create 55,000 openings for workplace placement and training in industries with serious staff shortages, such as construction, health and social care, hospitality, and logistics, and will initially target areas with high youth employment in Greater Manchester, the Midlands, Wales, and central and eastern Scotland, from April 2026 onwards. The government ultimately hopes to create 350,000 new training and work experience placements.
Between July and September 2025, 946,000 young people in the UK were considered NEET, accounting for 12.7% of all people aged from 16 to 24. These numbers have steadily increased since 2021. The present cohort of NEETs belong to Generation Z, who, according to a widely used definition, were born between 1995 and 2010-after Generation Y (Millennials) (1981-1994), and followed by Generation Alpha (2011 onwards). The NEET phenomenon is a direct result of the many issues confronting members of Generation Z, more commonly referred to as Gen Z, which became the first generation to grow up with the Internet. The defining birth year of 1995 saw the public debut of the World Wide Web, the launch of Amazon, eBay, and MSN, among others, and the release of Windows 95 by Microsoft. Gen Zers have since grown up in a digital world, living through the 2008 financial crisis, the Brexit referendum of 2016, the COVID-19 pandemic lockdowns of 2020-2022, an ongoing climate crisis, increasingly polarised politics, and the ascendance of populist regimes across the world.
Unlike their predecessors, Gen Zers have been hard done by in terms of their long-term aspirations. It is worth considering the individual elements of ‘EET’ to better understand the predicament of ‘economically inactive’ young people. Higher education has become financially inaccessible for some and irrelevant for many others. Graduates are often saddled with crippling student loan debts and cannot be guaranteed meaningful employment that uses skills that they acquired at college or university. When it comes to employment, the job market has also changed. Gone are lifelong jobs where one could work one’s way up the ladder and be guaranteed a comfortable pension at the end. Pulling oneself up by one’s bootstraps and going on to ‘live the dream’ has become next to impossible for most youngsters. Instead, part-time, low-skilled, and low-paid jobs are on the rise, zero-hour contracts have proliferated, and the gig economy and remote working prop up the employment figures. Gen Zers themselves often prefer flexible working, freelancing, or building up a portfolio of jobs, and value work-life balance and discretionary free time in place of conventional 9-5 jobs five days a week, which are in steady decline. Meanwhile, training opportunities, such as apprenticeships or vocational courses, can be difficult to find and are often underfunded or unfunded, leaving many youngsters in a limbo. Overall, there are few incentives to either continue with formal education (sixth form, further education college, university), get a job, or undergo training, explaining the growth in numbers of the NEET. High rents and mortgages are further disillusioning young people, many of whom expect to never be able to afford a home of their own, as the property-owning democracy rapidly becomes a past memory. The mental health crisis, with growing levels of anxiety and depression contributing to long-term sickness and absenteeism, can be considered an expected response to the prospects of an uncertain and uncomfortable future, complicated by escalating global conflict and disproportionate climate anxiety. An overreliance on, and addiction to, social media platforms has only made matters worse by contributing to poor self-perceptions of body image and low confidence.
The NEET issue is a global problem, and the UK is by no means among the worst affected. But Britain’s service-based economy has structural issues of its own. ‘Manufacturing’ jobs of dubious quality will not compensate for a skills deficit, lack of investment in infrastructure and innovation, and a paucity of jobs in manufacturing. Automation and AI are bound to further slash jobs in both the service and manufacturing sectors, while the costs of employing people in hospitality services have risen substantially due to a growing tax burden on employers. The sum of £820 million may be a welcome move in the right direction, but there is a long way to go and a lot of work to be done before NEET numbers can be seen to fall to more manageable levels. Young people are the nation’s future, and youth unemployment is a scourge that requires stronger treatment than has been prescribed until now. It is an uphill task to overcome years of neglect and failed attempts to address youth employment in the past. Meanwhile, we have to remain patient until we can see any positive results from the government’s latest actions.
Ashis Banerjee