Hundreds of thousands of graduates are now relying on welfare support, as rising numbers report health problems that prevent them from working and analysts question whether some university courses are equipping students for the labour market.
Fresh research from the Centre for Social Justice shows that 707,000 people with degrees were not in employment and claiming at least one benefit at the end of last year, a rise of roughly 46 per cent compared with the period before pandemic restrictions in 2019.
Ill health accounts for much of the increase. The number of graduates unable to work because of sickness or disability climbed from 117,000 six years ago to 240,000 in 2025, meaning the figure has more than doubled. About one third of jobless graduates now list health as the main barrier to employment.
The think tank also points to a growing gap between the qualifications students are gaining and the skills businesses are seeking. It argues that some courses offer weak economic returns, leaving young people with large debts and limited improvements in future pay.
Its analysis highlights a marked rise in young people moving directly from university onto sickness benefits. Among graduates under 30 claiming support such as Universal Credit, more than 80 per cent said health issues were the reason.
Andrew Griffith, the shadow business secretary, said many young people were desperate to find work but were facing fierce competition. He described cases of graduates sending out vast numbers of job applications without response, adding that the strain of repeated rejection could worsen mental health.
Conservatives say Labour’s sharp rises in the minimum wage and National Insurance contributions have battered entry level hiring. Recruitment specialist Jo Powell said firms were now reluctant to take on juniors or apprentices because of higher wage bills, adding that many smaller businesses were cutting back on recruitment altogether.
The issue comes against a backdrop of nearly one million people aged between 16 and 24 who are currently not in work, education or training, prompting warnings about long term dependence on state support.
Alongside this, vocational pathways appear to have lost ground. The CSJ says apprenticeship numbers among school and college leavers have dropped by about 40 per cent over recent years, even though higher level apprentices are often securing stronger salaries than many graduates.
According to the report, individuals who completed a level four apprenticeship, equivalent to the first year of a university course combined with practical training, were earning close to £12,500 more five years later than graduates from low value degrees and about £5,000 more than the average graduate. Those finishing lower level apprenticeships were also matching or exceeding the pay of people from poorer performing degree programmes.
Incomes for graduates have also been squeezed by changes in wage policy. The Resolution Foundation has found that two decades ago graduates typically earned two and a half times the minimum wage, but by 2023 that margin had narrowed to around 1.6 times.
Daniel Lilley of the CSJ said policymakers needed to rethink the long standing assumption that higher education should be the automatic choice after school. He argued that technical training had for too long been treated as a lesser option, leaving employers short of workers with practical skills.
Government statistics show that three young people head to university for every one who chooses vocational education, while in Germany the split is closer to even, a difference often linked to higher productivity.
Mr Lilley said strengthening technical routes would give young people better prospects while helping businesses fill vacancies in key sectors.
A Government spokesman said ministers were focused on supporting young people into work and skills programmes, highlighting a new Jobs Guarantee scheme that offers paid placements with employers including E.ON, JD Sports, Tesco and TUI.
He added that £1.5 billion is being directed towards training and apprenticeship schemes, and confirmed that former health secretary Alan Milburn has been tasked with leading a review into the obstacles facing younger workers, which the Government says will be addressed urgently.
