One in three graduates who are unemployed and receiving benefits say their poor health is preventing them from finding work, as new analysis highlights growing concerns about the value of some university degrees and the UK’s approach to skills training.
Research from the Center for Social Justice (CSJ) shows that 707,000 graduates are now applying for benefits, a 46 percent increase since 2019. Of those, around 240,000 cited health problems as the main reason for their inability to work in 2025, up from 117,000 before the pandemic.
The results come against the background of increasing unemployment among young people. Government data suggests that there are almost 950,000 people who are not in education, employment or training (Neets). The CSJ reports that 80 percent of graduates under 30 who are eligible for benefits report health problems.
The picture is particularly clear among unemployed 16 to 24 year olds. Only 34 percent have qualifications at A level or above, while around 30 percent have qualifications at GCSE level and 36 percent have qualifications below GCSE or at an unknown level.
The analysis has increased scrutiny of degrees with low earning potential. According to the CSJ, some performing arts graduates at institutions such as the Conservatoire for Dance and Drama and the University of Wales Trinity Saint David were earning less than £20,000 five years after graduating. Psychology graduates from the University of Suffolk and the University of Bolton earned less than £21,000 in the same period.
In a report published in December, the CSJ urged ministers to “stop producing graduates and start training the workforce,” arguing that career pathways deliver better outcomes for many young people.
The analysis showed that higher-level training occupations consistently produce better qualifications in terms of income. While the lowest-paid quarter of graduates earned £24,800 five years after leaving university, those completing level 2 apprenticeships earned £24,810 and those on level 3 apprenticeships earned £28,260. Higher education jobs, including jobs such as accounting technicians, child therapists and network engineers, delivered average earnings of £37,300.
Similar conclusions were reached by the Resolution Foundation, which found that the graduate salary premium has been steadily declining. Two decades ago, graduates earned about 2.5 times the minimum wage; by 2023, this value had fallen to 1.6 times.
The CSJ also highlighted that the UK relies heavily on university pathways compared to European peers. For every three young people who attend university in the UK, only one completes vocational training. In the Netherlands the ratio is two to one, while in Germany it is one to one.
The results put renewed pressure on Keir Starmer, who said last year that Britain’s benefits system was “broken” and that reform was a “moral imperative.” The government initially aimed to save £5 billion by tightening eligibility for Personal Independence Payment (PIP) and other health-related benefits. However, these plans were delayed due to opposition from Labor backbenchers.
The number of people applying for PIP continues to rise, reaching around 3.9 million recipients in 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 inquiry into youth inactivity, warned last week of a “lost generation” of almost a million people aged 16 to 24 who are neither working nor studying. He argued that successive governments had prioritized measures to benefit older generations, resulting in Britain facing a “moral, social and economic crisis”.
A government spokesman said ministers were committed to supporting young people into work, citing a guarantee of new jobs and £1.5 billion of investment in education and training.
“We are helping young people who are unemployed find paid internships. Employers such as E.ON, JD Sports, Tesco and TUI have already signed up,” the spokesman said. “We have also tasked Alan Milburn with getting to the bottom of the causes holding young people back, as this issue requires urgent action.”
The CSJ argues that without a decisive move away from substandard qualifications and towards vocational and technical training, the number of graduates unable to find work and relying on benefits will continue to rise.
