732,000 Young People Unemployed — The System That Priced Out a Generation

Three Things Happened at Once

732,000 people aged 16 to 24 are unemployed in the UK. That is 99,000 more than a year ago. The youth unemployment rate has hit 16.0%, up from 14.5% twelve months earlier. A further 957,000 are not in employment, education, or training at all.

Three things happened at once: the government raised the cost of hiring young people, employers responded by hiring fewer of them, and AI started replacing the entry-level roles that were left.

13,000 Graduate Roles to 2,000

In 2019, London advertised approximately 13,000 graduate positions. In early 2026, that number is just over 2,000. Nationwide, graduate vacancies have fallen below 10,000 for the first time since Adzuna began tracking in 2016 — a 45% year-on-year decline. Applications for the remaining roles are up 28%.

One in four Londoners aged 16 to 24 is actively looking for work and cannot find it. The jobs they relied on — retail, admin, customer service, entry-level office work — have collapsed across the board.

The Cost of Hiring a Young Person

In April 2025, employer National Insurance went from 13.8% to 15%. The threshold dropped from £9,100 to £5,000. The 18-to-20 minimum wage rose 16.3% in the same month, from £8.60 to £10.00. In April 2026 it rises again to £10.85.

Between October 2024 and April 2025, employee jobs fell by 167,000. Among under-25s, the drop was 1.6% — three times the rate across all age groups. The British Chambers of Commerce found 58% of firms expected the NI rise to directly affect recruitment. Each government decision makes hiring a young person more expensive.

£24,000 a Year vs £50 a Month

Entry-level job postings have dropped 30% since the launch of ChatGPT, according to Adzuna. A King’s College London study found firms highly exposed to AI cut junior positions by 5.8%. Two-fifths of employers say entry-level roles have already been reduced or eliminated because of AI tools.

A junior admin costs £24,000 to £28,000 a year. The AI that covers scheduling, filing, and correspondence costs under £50 a month. For an employer already facing higher NI and a 16% minimum wage hike, the decision is arithmetic.

£1 Billion to Fix £1 Billion of Damage

The government has announced a £1 billion youth employment programme for 200,000 jobs and apprenticeships. There are 732,000 young people unemployed. That is one role for every four who need one — assuming every role materialises in an economy where employers are cutting back because of the government’s own tax increases.

Employer NI up. Minimum wage up. Entry-level roles automated. Employee jobs down 167,000. Youth unemployment at 16%. The sequence is not complicated.