The number of UK university graduates claiming benefits has surged to 707,000. With health conditions and job market struggles playing a role, the government has launched a £1.5 billion response.
The Department for Work and Pensions (DWP) is preparing immediate measures to address the sharp rise in benefit claims among university graduates. The figure, which stood at just under half a million before the pandemic, has increased by 46 percent, sparking concern across political parties and prompting action from ministers.
This increase highlights a complex set of challenges involving education quality, mental health, and access to work for young people. As debate intensifies around the value of certain degree programmes, the government has announced a new scheme aimed at providing job placements and apprenticeships for young adults.
Rise in Health-Related Unemployment among Graduates
According to figures compiled by the Centre for Social Justice (CSJ), of the 707,000 graduates currently out of work and receiving benefits, 240,000 are doing so on health grounds, more than double the number recorded in 2019. These figures indicate that one in three jobless graduates are now citing health reasons for their unemployment.
The same report revealed that more than 80 percent of under-30s on Universal Credit with a degree attribute their benefit claims to health issues. In response, government officials are highlighting the complexity of post-pandemic trends in the workforce. “We are determined to support young people into work and gain the skills they need to succeed,” a government spokesperson said.
According to BirminghamLive, the DWP has committed £1.5 billion to support young people who are neither working nor studying, with the launch of a new “Jobs Guarantee” initiative. Companies including Tesco, JD Sports, TUI and E.ON have signed on to provide paid placements for young jobseekers.
Former Health Secretary Alan Milburn has been commissioned to lead a comprehensive review into the causes behind the rising numbers of young people relying on welfare. His work will aim to determine how best to reverse the trend and reconnect graduates with the labour market.
Calls to Reconsider the Role of Universities in Workforce Preparation
The CSJ attributes part of the rise in graduate benefit claims to an overemphasis on academic pathways at the expense of practical and technical training. Its analysis suggests that many young people are leaving university with qualifications that do not match labour market needs.
Daniel Lilley, a senior researcher at the think tank, stated that the UK’s education system has become “obsessed” with university, leading to a mismatch between qualifications and employment opportunities. “If we are serious about repairing broken Britain, we must give young people the opportunity to succeed and fuel key industries with the domestic skills they need to grow,” he said, according to BirminghamLive.
This mismatch appears to be reflected in earnings outcomes. The CSJ found that those who completed Level 4 apprenticeships (equivalent to a first-year university degree) now earn significantly more than many graduates from lower-ranking universities. Five years post-qualification, Level 4 apprentices were earning up to £12,500 more than graduates from what the CSJ calls “low-value” courses.
In light of these findings, cross-party support is emerging for expanding vocational training routes. The decline in apprenticeships (down 40 percent in the past decade) has coincided with increased graduate joblessness, prompting concerns that the country is failing to equip young people for the current labour market.
The DWP has also introduced new fraud-check measures, including eligibility verification notices and financial account checks, to ensure that benefit claims remain accurate and fair. As the government pushes forward with reforms, ministers have signalled that this is only the beginning of broader efforts to recalibrate the relationship between education, work, and welfare.
