Youth unemployment rate

Prior to the start of the five-year period the youth unemployment rate in the United Kingdom had reached its highest level in three decades, amounting to a staggering 21.6% in 2011-12. The collapse of the financial markets in 2008 and economic downturn that followed heavily affected the labour market and particularly affected youth unemployment, compounded by government cuts to education opportunities.

In the base year, youth unemployment was at 12.2% and falling. This trend of falling youth unemployment continued throughout the majority of the period, as the economy strengthened and as general employment conditions improved. The period led to the joint lowest employment levels on record among those aged 16-64 years. While youth employment tends to lag general employment levels, as people in this category tend to lack the experience desired by employers, many more have gone into higher and further education. This was aided by the raising of the school leaving age to 18 years old in 2015, meaning a greater proportion remained in education rather than leaving to seek employment. Additionally, a greater proportion of school leavers have been attending university, which has pushed down unemployment levels, as caps on places have risen above forecast growth. The government's push towards creating apprenticeship opportunities for younger people has also reduced employment levels, backed by the apprenticeship levy, in which large companies will pay 0.5% of their wage bill to help fund apprenticeship schemes. As a result, the youth unemployment rate reached a low of 11.6% in 2019-20.

In 2020-21, the unemployment rate for 16-24-year-olds jumped substantially by 2.4 percentage points, as a result of the COVID-19 (coronavirus) outbreak. This rise was subdued slightly by the government's Coronavirus Job Retention Scheme, in which the government assumes the cost of employment where there is not enough demand for the employee to justify retention. As this scheme was renewed through to September 2021, with the reopening of the domestic economy and easing of restrictions over 2021-22, made possible through the COVID-19 vaccination programme, the youth unemployment rate fell by 2.1 percentage points in 2021-22, to 13.3%. Younger people were more likely to have been impacted by the economic effects of the coronavirus in 2020-21, as they make up a larger proportion of the workforce in highly impacted sectors of the economy, such as retail. However, easing restrictions during 2021-22 allowed retail stores to reopen, reducing youth unemployment. This trend is expected to persist over the current year, as the youth unemployment rate is projected to fall by 0.4 percentage points, to 11.5%. Hence, over the five years through 2022-23, the youth unemployment rate is expected to fall by 0.8 percentage points.