{"id":24487,"date":"2026-02-11T17:58:23","date_gmt":"2026-02-11T17:58:23","guid":{"rendered":"https:\/\/www.adzuna.co.uk\/blog\/?p=24487"},"modified":"2026-02-11T17:58:23","modified_gmt":"2026-02-11T17:58:23","slug":"uk-youth-employment-crisis-the-perfect-storm-of-2025","status":"publish","type":"post","link":"https:\/\/www.adzuna.co.uk\/blog\/uk-youth-employment-crisis-the-perfect-storm-of-2025\/","title":{"rendered":"UK youth employment crisis: The perfect storm of 2025"},"content":{"rendered":"<p><em><b>By Nick Litsardopoulos, Research Economist, IES.<\/b><\/em><\/p>\n<p><span style=\"font-weight: 400;\">The UK labour market faces unprecedented challenges with unemployment, particularly for young workers and graduates. What emerges is a troubling picture of declining opportunities, structural shifts, and a generation at risk.<\/span><\/p>\n<h2>The Demand Collapse<\/h2>\n<p><span style=\"font-weight: 400;\">The UK labour market has experienced a persistent downward trend in job demand over the last three years. Most strikingly, graduate positions have plummeted. In <\/span><a href=\"https:\/\/www.ft.com\/content\/149a50ee-0d3f-4d51-ab87-3b0430aa9df3\"><span style=\"font-weight: 400;\">2025 alone graduate positions were reduced by 33%,<\/span><\/a><span style=\"font-weight: 400;\"> reaching the lowest level since 2018. This marks the second consecutive year of decline, creating fierce competition as previous cohorts continue struggling to find suitable employment. <\/span><a href=\"https:\/\/economy2030.resolutionfoundation.org\/wp-content\/uploads\/2022\/01\/Changing-jobs.pdf\"><span style=\"font-weight: 400;\">The Resolution Foundation<\/span><\/a><span style=\"font-weight: 400;\"> has reported that job mobility rates are now lower than in the 1980s, signalling a fundamental shift in labour market dynamics.<\/span><\/p>\n<h2>Industry Analysis: The Paradox of Rising Salaries<\/h2>\n<p><span style=\"font-weight: 400;\">Data from the <\/span><a href=\"https:\/\/www.adzuna.co.uk\/hire\/labour-market-intelligence\/\"><span style=\"font-weight: 400;\">Adzuna intelligence portal<\/span><\/a><span style=\"font-weight: 400;\"> reveals a troubling paradox across major industries between 2024 and 2025. The data allows us to examine the demand in graduate job roles across major industrial sectors along with the median salary offered in these sectors. According to the job advertisement data between 2024 and 2025 the median salaries have increased in industries associated with the Arts entertainment and recreation, Human health and social work, Information and communication, the broader Public administration activities (including Defence), and Wholesale\/Retail trade. However, in each of these industries Demand has decreased; and on some occasions, like the Information and communications sector, it has decreased quite substantially.<\/span><\/p>\n<p><em><b><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-24492\" src=\"https:\/\/www.adzuna.co.uk\/blog\/wp-content\/uploads\/2026\/02\/graduate-jobs-market-2024-vs-2025-300x145.png\" alt=\"\" width=\"956\" height=\"462\" srcset=\"https:\/\/www.adzuna.co.uk\/blog\/wp-content\/uploads\/2026\/02\/graduate-jobs-market-2024-vs-2025-300x145.png 300w, https:\/\/www.adzuna.co.uk\/blog\/wp-content\/uploads\/2026\/02\/graduate-jobs-market-2024-vs-2025-1024x495.png 1024w, https:\/\/www.adzuna.co.uk\/blog\/wp-content\/uploads\/2026\/02\/graduate-jobs-market-2024-vs-2025-768x372.png 768w, https:\/\/www.adzuna.co.uk\/blog\/wp-content\/uploads\/2026\/02\/graduate-jobs-market-2024-vs-2025-1536x743.png 1536w, https:\/\/www.adzuna.co.uk\/blog\/wp-content\/uploads\/2026\/02\/graduate-jobs-market-2024-vs-2025-2048x991.png 2048w\" sizes=\"auto, (max-width: 956px) 100vw, 956px\" \/><\/b><\/em><\/p>\n<p><em><b>Figure 1. Demand and Median Salaries for graduate jobs across major industries<\/b><\/em><\/p>\n<h2>Graduate Outcomes: Underemployment Epidemic<\/h2>\n<p><span style=\"font-weight: 400;\">The UK graduate roles statistics paint a sobering picture:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Just <\/span><a href=\"https:\/\/www.theguardian.com\/money\/article\/2024\/aug\/29\/uk-graduates-struggle-job-market\"><span style=\"font-weight: 400;\">61% of 2022 graduates secured full-time work 15 months<\/span><\/a><span style=\"font-weight: 400;\"> after graduation, with many in non-graduate roles<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">According to the ONS, only 60% of graduates aged 21-30 in England work in &#8220;high-skilled&#8221; positions<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Approximately 26% are in medium or low-skilled employment<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">5.5% remain unemployed<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">As the CIPD highlighted in their 2024 report, three decades of higher education expansion has led to &#8220;a growing number of graduates [entering] occupations where a degree is not necessary.&#8221; Young people delay labour market entry to pursue degrees, only to find themselves competing for roles that don&#8217;t require their qualifications.<\/span><\/p>\n<p><b>The AI Factor: Displacement and Discouragement<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Artificial intelligence represents a disproportionate threat to youth employment. Young workers concentrate in sectors with highly automatable tasks, making them particularly vulnerable to displacement or augmentation. The psychological impact is profound: more than one in four young people report avoiding job applications or courses because they fear AI will replace those roles. Whether these fears prove accurate or not, the discouragement itself creates negative implications for future employment potential.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Recent research on the &#8220;agentic economy&#8221; suggests AI agents could eliminate the need for intermediary platforms entirely. The jobs market is witnessing a \u201cdouble squeeze\u201d of economic stagnation (leading to employer caution) and the rapid integration of Generative AI that seem to be automating the entry-level tasks traditionally used to train new workers. Until economies expand and create demand for new skills and expertise, the market will likely continue face a volatile period of suppressed hiring. Alarmingly, <\/span><a href=\"https:\/\/www.gov.uk\/government\/publications\/ai-labour-market-survey-2025-report\/ai-labour-market-survey-2025-report-executive-summary#:~:text=Notably%2C%20only%2013%25%20of%20graduate,accelerating%20adoption%20of%20AI%20technologies.\"><span style=\"font-weight: 400;\">only 13% of graduate schemes include AI training<\/span><\/a><span style=\"font-weight: 400;\">, leaving young workers unprepared for the very technology reshaping their career prospects.<\/span><\/p>\n<p><b>Current Employment Reality<\/b><\/p>\n<p><a href=\"https:\/\/researchbriefings.files.parliament.uk\/documents\/SN05871\/SN05871.pdf\"><span style=\"font-weight: 400;\">Government data from 2025<\/span><\/a><span style=\"font-weight: 400;\"> shows:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">3.85 million young people aged 16-24 in employment<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Employment rate of just 51.6%<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Unemployment rate for 18-24 year-olds at 13.4%, up from 12.7% in 2024<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">These figures likely underestimate the crisis, as they don&#8217;t capture everyone out of work or reflect the quality of available opportunities.<\/span><\/p>\n<p><b>The Mental Health Crisis<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Mental health has emerged as both cause and consequence of youth unemployment, creating a vicious cycle. The <\/span><a href=\"https:\/\/youthfuturesfoundation.org\/publication\/youth-employment-2024-outlook\/\"><span style=\"font-weight: 400;\">Youth Employment 2024 Outlook<\/span><\/a><span style=\"font-weight: 400;\"> found that 85% of young people with mental health conditions believe it affects their ability to find or function in work. The Resolution Foundation notes that one-third of 18-24 year-olds report having a common mental disorder, rising to two-fifths among young women. This crisis threatens to create what researchers term a &#8220;lost generation\u201d. In <\/span><a href=\"https:\/\/www.ons.gov.uk\/employmentandlabourmarket\/peoplenotinwork\/unemployment\/bulletins\/youngpeoplenotineducationemploymentortrainingneet\/november2025\"><span style=\"font-weight: 400;\">September 2025 ONS<\/span><\/a><span style=\"font-weight: 400;\"> reported that the number of economically inactive aged 16 to 24 years who were NEET was at an estimated 580,000 young people. Another recent report estimates that the overall number of <\/span><a href=\"https:\/\/www.gov.uk\/government\/statistics\/the-employment-of-disabled-people-2024\"><span style=\"font-weight: 400;\">disabled people aged 16-24 years not-in-employment was at 811,000<\/span><\/a><span style=\"font-weight: 400;\">, which is an increase of 65% since 2013.\u00a0<\/span><\/p>\n<p><b>Policy Response and Future Directions<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The UK&#8217;s Get Britain Working white paper and Youth Guarantee initiative represent important first steps. However, addressing this multifaceted crisis requires comprehensive action:<\/span><\/p>\n<p><b>Immediate Priorities:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fund &#8220;AI Skilling Hubs&#8221; in areas beyond major urban centres to prevent widening regional divides.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Implement continuous upskilling schemes aligned with evolving AI-era needs<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Consider &#8220;human-centric&#8221; tax credits encouraging companies to retain staff<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Provide significant support for mid-career retraining<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The youth employment crisis of 2025 reflects converging forces: cyclical economic uncertainty, structural AI-driven disruption, inadequate skills preparation, and a devastating mental health epidemic. Without urgent, comprehensive intervention across education, technology policy, mental health support, and economic strategy, we risk condemning an entire generation to diminished prospects and unfulfilled potential. Moreover, as labour-based tax revenue declines, governments may need to pivot toward higher VAT or specific taxes on &#8220;automated transactions&#8221; executed by AI agents. Pressure for Universal Basic Income or similar schemes will likely increase to support populations during this &#8220;hiring stall&#8221;. The data is clear: young people face not just a difficult job market, but a fundamentally transformed landscape requiring radical policy innovation to ensure their futures.<\/span><\/p>\n<p><a href=\"https:\/\/www.employment-studies.co.uk\/\"><i>IES<\/i><\/a><i>\u00a0is an independent, apolitical, international centre of research and consultancy in public employment policy and HR management. It works closely with employers in all sectors, government departments, agencies, professional bodies and associations. IES is a focus of knowledge and practical experience in employment and training policy, the operation of labour markets, and HR planning and development. IES is a not-for-profit organisation<\/i>.<\/p>\n<div class=\"blog-cta-box\">Want to get data insights to help you make more informed decisions?\u00a0<a href=\"https:\/\/www.adzuna.co.uk\/adzuna-intelligence\/contact\/\">Speak to our Adzuna Intelligence team.<\/a><\/div>\n<div>\n<hr \/>\n<p><strong><img decoding=\"async\" class=\"emoji\" draggable=\"false\" src=\"https:\/\/s.w.org\/images\/core\/emoji\/11\/svg\/1f4a1.svg\" alt=\"\" \/>\u00a0Read more:\u00a0<\/strong><a href=\"https:\/\/www.adzuna.co.uk\/blog\/rethinking-the-productivity-pay-relationship-implications-for-innovation-policy\/\">Rethinking the productivity pay relationship implications for innovation policy<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>By Nick Litsardopoulos, Research Economist, IES. The UK labour market faces unprecedented challenges with unemployment, particularly for young workers and graduates. What emerges is a troubling picture of declining opportunities, structural shifts, and a generation at risk. The Demand Collapse The UK labour market has experienced a persistent downward trend in job demand over the<a class=\"moretag\" href=\"https:\/\/www.adzuna.co.uk\/blog\/uk-youth-employment-crisis-the-perfect-storm-of-2025\/\"> Continued \u00bb<\/a><\/p>\n","protected":false},"author":76,"featured_media":24498,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1168],"tags":[],"class_list":["post-24487","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-adzuna-intelligence"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/posts\/24487","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/users\/76"}],"replies":[{"embeddable":true,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=24487"}],"version-history":[{"count":3,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/posts\/24487\/revisions"}],"predecessor-version":[{"id":24499,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/posts\/24487\/revisions\/24499"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/media\/24498"}],"wp:attachment":[{"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=24487"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=24487"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.adzuna.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=24487"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}