One in three graduates with benefits say poor health prevents them from working

One in three graduates who are unemployed and on benefits say ill health is preventing them from finding work, as new analysis highlights growing concerns about the value of other university qualifications and the UK’s approach to skills training.

Research by the Center for Social Justice (CSJ) shows that 707,000 graduates are now claiming benefits, a 46 percent increase from 2019. Of those, about 240,000 health problems will be the main reason they cannot work in 2025, up from 117,000 before the pandemic.

The findings come against a backdrop of rising unemployment among young people. Government data shows there are around 950,000 people not in education, employment or training (Neets), and the CSJ reported that 80 per cent of graduates under the age of 30 seeking benefits point to health-related issues.

The picture is particularly stark for 16 to 24-year-olds who are unemployed. Only 34 per cent have qualifications at A level or above, while around 30 per cent have qualifications at GCSE level and 36 per cent have qualifications below GCSE or at unknown level.

Analysis strengthened the consideration of degrees with low earning power. According to the CSJ, some performing arts graduates from institutions including the Conservatoire for Dance and Drama and the University of Wales Trinity Saint David earned less than £20,000 five years after graduation. Psychology graduates from the University of Suffolk and the University of Bolton earned less than £21,000 over the same period.

In a report published in December, the CSJ urged ministers to “stop firing graduates and start training workers”, arguing that vocational routes offer strong results for many young people.

Your analysis found that apprenticeships consistently outperform degrees in terms of earnings. While the lowest paid quarter of graduates earn £24,800 five years after leaving university, those who complete a Level 2 course earn £24,810, rising to £28,260 for a Level 3 apprenticeship. Higher-level apprenticeships, including roles such as financial specialists, paediatricians and network engineers, brought in average earnings of £37,300.

Similar conclusions have been reached by the Resolution Foundation, which found that graduate student pay is steadily eroding. Two decades ago, college graduates earned about 2.5 times the minimum wage; by 2023 that number had dropped to 1.6 times.

The CSJ also highlighted the UK’s greater reliance on university routes compared to its European peers. In three young people entering British university, only one pursues an apprenticeship. In the Netherlands the ratio is two people to one, while in Germany it is equal to one person.

The findings put renewed pressure on Keir Starmer, who said last year that the UK benefits system was “broken” and that reform was a “moral imperative”. The government originally aimed to save £5 billion by tightening eligibility for Personal Independence Payment (PIP) and other health-related benefits, but those plans were delayed after opposition from Labor backbenchers.

The number of people claiming PIP continues to rise, with an estimated 3.9 million recipients by October 2024, 200,000 more than at the start of the year. The Department for Work and Pensions predicts that 8.7 million people will be claiming disability benefits by the start of the next decade, up from just under 7 million today.

Former Labor cabinet minister Alan Milburn, who is leading a government-commissioned review into youth unemployment, warned last week of a “lost generation” of nearly a million 16- to 24-year-olds who are out of work and education. He pointed out that successive governments had prioritized policies that benefited older generations, leaving Britain facing a “moral, social and economic crisis”.

A government spokesman said ministers are committed to supporting young people into work, pointing to a guarantee of new jobs and £1.5 billion investment in training and education.

“We are helping young people who have lost their jobs to be placed in paid positions, as employers such as E.ON, JD Sports, Tesco and TUI have already committed,” said the spokesperson. “We have also tasked Alan Milburn to find the root of what is holding young people back because this issue requires urgent action.”

CSJ argues that without a definite shift away from low-level qualifications and towards vocational and technical training, the number of graduates who cannot find work, and are dependent on benefits, will continue to rise.