Seniors Housing & Healthcare Trends

MELBOURNE: More than a quarter of young people who are not in education or work are living at home off the Bank of Mum and Dad, a report into the youth unemployment crisis has found.

There are almost one million young people aged 16-24 classed as not in education, training or employment (Neets). However, about 300,000 do not claim benefits. They are said to be “hidden”, given that they are not seeking state support, either financially or to find work.

The Institute for Fiscal Studies (IFS) found that 80 per cent of the hidden Neets are at home living with their parents. Some 82 per cent of the cohort are aged 22-23 and are actively looking for work, undertaking voluntary work or in a “temporary transition”, such as a post-university gap year.

More than half of this group have a degree, compared with just 12 per cent of those Neets who are claiming benefits.

Alan Milburn, the former Labour health secretary, is carrying out a review into the youth unemployment crisis and warned earlier this year that hidden Neets were “one of the most troubling findings” of his research.

However, Jed Michael, a research economist who carried out the IFS study, said that hidden Neets were “much more likely to have good job prospects” than those on benefits.

He said: “Some of the recent policy discussion on hidden Neets has assumed that they are a particularly vulnerable group that has fallen through the cracks in government support and so demand particular policy attention.

“However, our research suggests [they] are much more likely to have good job prospects than Neets receiving benefits, less likely to have been Neet for a long time and relatively few report poor health or a disability. They are also less likely to be struggling financially.”

Hidden Neets are typically eligible for at least £4,000 per year in benefits, which they are not claiming. Despite this, just 7 per cent said they are finding it “very difficult” to manage financially, compared with 12 per cent of those who are claiming benefits.

The IFS research found that 37 per cent of hidden Neets, about 110,000, come from households in the top third of the national income distribution, compared with 6 per cent of those who claim benefits.

Only 2 per cent of the hidden cohort said they are out of work because of sickness or disability, compared with 27 per cent of those receiving benefits.

A source close to Milburn said there was still a cost to being a hidden Neet in the long term. His team, based at the Department for Work and Pensions (DWP), have analysed data from the 2021 census and found that of those young people in work at the time of the research, 83 per cent were still in work three years later.

However, those who were in the hidden Neet group at the time, for example because of a gap year or while searching for work, were only 67 per cent likely to be in work in the 2024-25 financial year. Of those already Neet and on benefits in 2021, only 46 per cent were in work.

Milburn, who chairs the Young People and Work review, said: “Over 300,000 youngsters falling through the gaps as hidden Neets shows there is no system to help them into earning or learning.

“The spaghetti soup of organisations trying to deal with the Neet crisis means no one takes overall responsibility. My review will address this accountability deficit.”

Milburn is due to publish his recommendations on how to tackle the youth unemployment crisis next month. He has called the overall number of Neets a “scar on this country”.

A DWP spokeswoman said: “Every young person deserves the chance to build a future they can be proud of, and our Jobcentres are available to support those including graduates trying to find work.

“Thanks to our £2.5 billion investment, there are more opportunities opening up for those looking to take the next step in their career, supporting almost one million young people and unlocking up to 500,000 jobs and training opportunities.”