One in three graduates who are out of work and claiming benefits say poor health is preventing them from finding employment, according to new analysis that raises concerns over the value of some university degrees and the UK’s approach to skills training.
Research by the Centre for Social Justice (CSJ) shows that 707,000 graduates were claiming benefits in 2025, a 46 percent increase since 2019. Of these, roughly 240,000 cited health problems as the main barrier to employment, up from 117,000 before the pandemic. Government data indicates nearly 950,000 young people are not in education, employment, or training, with the CSJ reporting that 80 percent of benefit-claiming graduates under 30 point to health-related issues.
The situation is particularly stark among 16- to 24-year-olds who are out of work. Only 34 percent have qualifications at A level or above, while 30 percent hold GCSE-level qualifications and 36 percent possess lower or unknown qualifications.
The CSJ’s analysis also highlighted that some university courses deliver poor earnings outcomes. Performing arts graduates from institutions including the Conservatoire for Dance and Drama and the University of Wales Trinity Saint David earned under £20,000 five years after graduating. Psychology graduates from the University of Suffolk and University of Bolton earned below £21,000 in the same period.
The report argues that vocational training can offer stronger financial prospects. Graduates in the lowest-paid quarter earned £24,800 five years after completing university, while those completing level 2 apprenticeships earned £24,810, rising to £28,260 for level 3 apprenticeships. Higher-level apprenticeships, including roles such as accounting technicians, child therapists, and network engineers, delivered average earnings of £37,300.
The findings reflect a broader decline in the graduate wage premium. The Resolution Foundation noted that while graduates once earned around 2.5 times the minimum wage two decades ago, by 2023 that figure had fallen to 1.6 times. The CSJ also pointed out the UK’s heavy reliance on university routes compared with European peers. For every three young people entering university in Britain, only one pursues vocational training. By contrast, the ratio in the Netherlands is two-to-one, and in Germany it is one-to-one.
Former Labour cabinet minister Alan Milburn, leading a government-commissioned review into youth inactivity, warned of a “lost generation” of almost one million 16- to 24-year-olds who are neither working nor studying. He said successive governments had prioritised older generations, leaving Britain facing a “moral, social and economic crisis.”
A government spokesperson said ministers were determined to support young people into work, citing a new jobs guarantee and £1.5 billion of investment in apprenticeships and training. “We’re helping young people who are out of work into paid placements, with employers such as E.ON, JD Sports, Tesco, and TUI already pledged,” the spokesperson said.
The CSJ cautioned that without a decisive shift away from low-value degrees and towards vocational and technical training, the number of graduates unable to find work and reliant on benefits will continue to rise.
