The UK job market has shifted dramatically in recent years.
While the overall unemployment rate sits at 4.5%, a closer look reveals significant variations across different segments of the population. Of particular concern is the growing number of young people aged 18-24 who are struggling to find work since the COVID-19 pandemic.
Young people are facing greater challenges
Current figures paint a concerning picture: youth unemployment for 16-24 year olds has climbed to 14.6%, up from 12.8% last year.
This is more than three times the national average. According to recent data from the Youth Employment UK organisation, nearly one million young people (987,000) are not in full-time education or employment, with 595,000 classified as economically inactive and 392,000 actively seeking work.
Young workers have borne the brunt of economic changes since 2020. Many work in sectors that were hit hardest by lockdowns, such as hospitality and retail.
Their limited work history also puts them at a disadvantage when competing with more experienced candidates in a tight job market.
Why are more young people out of work?
Several factors contribute to this trend:
The pandemic disrupted education and training while reducing entry-level jobs during a time of economic uncertainty. Many young people missed critical transition periods between education and work.
Structural barriers continue to limit opportunities. These include:
- Few local job opportunities in many areas
- Employers increasingly seeking candidates with prior experience
- Gaps between what education provides and what employers need
- Limited quality vocational routes and careers information
- Older workers staying in the workforce longer, reducing new openings
Mental health challenges also play a significant role. Many young people report anxiety about work, particularly those who began their careers during lockdowns with limited in-person support networks.
Government responses to youth unemployment
The UK government has implemented several programmes aimed at supporting young job seekers. A £1 billion Youth Contract package focused on creating apprenticeships, work experience placements, and incentives for employers to hire young people.
Support services have expanded through Jobcentre Plus, with specialised Youth Hubs and Youth Employability Coaches providing targeted assistance. The Kickstart Scheme funded thousands of six-month work placements for young people on Universal Credit.
These initiatives aim to equip young people with relevant skills, prevent long-term unemployment, and create pathways to sustainable careers. However, their impact remains mixed, with many young people still struggling to gain a foothold in the job market.
The changing nature of working in the UK: gig economy and remote workers
Traditional employment statistics don’t capture the full picture of how people work today. Nearly 500,000 people (about 1.4% of the workforce) participate in the gig economy through platforms like food delivery and ride-sharing apps. This work often happens alongside studies or other employment and may not appear in official figures.
The home-based workforce has seen even more dramatic growth, more than doubling from 4.7 million to 9.9 million between 2019 and 2022. This shift reflects both pandemic adaptations and changing worker preferences.
Online freelancing and digital work represent another growing segment that crosses traditional employment categories. These workers may be classified as self-employed, part-time, or even unemployed in official statistics, despite earning income through platforms that didn’t exist a decade ago.
What does this mean for the future?
The rise in youth unemployment presents both immediate challenges and potential long-term consequences. Research shows that extended periods without work early in one’s career can lead to ‘scarring effects’ — lower earnings and reduced opportunities that persist for years.
Government interventions show recognition of the problem, but questions remain about whether current approaches address the root causes of youth unemployment in an increasingly digital and fragmented job market.
For young people specifically, creating clearer pathways between education and employment appears crucial. This means better alignment between what schools teach and what employers need, along with more robust careers guidance starting earlier in the education system.
The growing number of people working in non-traditional arrangements also suggests a need for updated policies and support systems that recognise the changing nature of work. Traditional employment metrics may no longer capture how and when people are productively engaged in the economy.
As we look ahead, addressing these challenges will require collaboration between government, employers, and education providers to create an employment landscape that works for everyone, particularly those just starting their careers.
If you are looking for employment right now and would like to discuss your career with our experts, then simply Register With Us and we would be happy to chat.
