Labour is fleecing young people out of a future

What’s needed now are targeted, supportive policies that genuinely help the young find their feet. Without that support, young people face mounting economic pressures from their student days onward.

The rise in student employment in the UK in recent years clearly illustrates how this phenomenon has intensified. The National Union of Students revealed that 69 per cent of full-time higher education students now work part-time alongside their studies (averaging 15 hours per week), with one in five working more than 20 hours. These positions are often low-grade roles in retail or hospitality, with students forced to skip classes, affecting their academic performance and increasing stress levels.

High living costs intensify this shift in working patterns. As many of us will remember, in earlier decades, this was far less common. After graduating, young adults today face an even more challenging hurdle: securing their first professional role. In 2024-25, around 1.2 million applications were submitted for just 17,000 entry-level positions. This shocking mismatch between supply and demand leaves young people with almost lottery-level chances of securing a job offer.

This contributes to a broader and more concerning trend in youth unemployment. The Office for National Statistics reports a 15.9 per cent unemployment rate among 16-24-year-olds (November 2025), affecting almost 730,000 young people. That is far higher than the national average of 5.1%, with the impact falling disproportionately on the young.

One outcome of this is skills erosion and shrinking earnings expectations. London's youth unemployment rate has now reached 21.5 per cent. GDP growth is anticipated to linger at 1.4 per cent in 2026, with unemployment stabilising near 5 per cent, but low productivity, at just 1.0 per cent, continues to hold back any meaningful increase in employment.

Looking for effective examples to buck this trend, the European Union launched its Youth Guarantee scheme in 2013, aiming to offer under-30s employment, further education, an apprenticeship, or a traineeship within four months of unemployment or leaving education. This is supported by national schemes that proactively engage with NEETs (not in education, employment, or training), helping to prevent low-value placements.

The result? EU-wide youth unemployment stood at 15.1 per cent in November 2025, better than the UK average of 15.9 per cent, with stark cross-border variations: Germany at 6.8 per cent, the Netherlands at 9.1 per cent, and Czechia at 9.8 per cent - all demonstrating the benefits of positive early intervention.

Housing is another major challenge for the young, with homeownership among the under-35s standing at 38.6 per cent. Fertility rates of 1.41(2024) are concerning, while ongoing fiscal drag and weak growth continue to grind down disposable incomes.

To improve prospects for young people, especially after higher education, forward-looking policies are essential. The UK's Youth Guarantee, which could provide 300,000 training opportunities, may be insufficient on its own. Drawing on the regional success of EU schemes, the UK could consider extending job or placement guarantees with short timelines, subsidising apprenticeships, or supplementing training wages to offset employer NIC hikes. Student loans also play a role. Housing support, such as deposit-matching schemes or expanded shared ownership, could help halt emigration.

Without similar interventions, youth unemployment risks climbing even further, whereas investing in jobs and opportunities for young people can deliver substantial, long-term gains.

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Professor Emese Lazar is a Professor of Finance at Henley Business School who researches risk measurement and management, model risk, econometric modelling and applications in finance.

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