Britain sees surge in number of graduates claiming benefits

The number of British graduates claiming benefits due to health problems has risen, with some analysts speculating whether university courses are sufficiently preparing students for the job market. 

According to the Centre for Social Justice (CSJ), over 700,000 graduates were unemployed and on at least one benefit by the end of last year. This increase has largely been attributed to health problems. 

In 2025 alone, 240,000 graduates reported being unable to work due to sickness or disability. 

The CSJ also suggests a gap between the qualifications that students earn and the skills employers are seeking. The think tank believes some degrees offer poor economic returns, leaving young people with massive debts and little advancement in future salaries.

[Shadow Business Secretary Andrew Griffith] acknowledged graduates sending out endless job applications without response, adding that repeated job rejections could worsen a candidate’s mental health

Their analysis showed a surge in the number of young people leaving university and then claiming benefits. Over 80% of graduates under 30 who claim welfare benefits, such as Universal Credit, have reported health issues as the reason. 

Andrew Griffith, the Shadow Business Secretary, said many young people are desperate to find work but are faced with high competition. He acknowledged graduates sending out endless job applications without response, adding that repeated job rejections could worsen a candidate’s mental health. 

The Conservatives have also claimed that Labour’s sharp rises in minimum wages and National Insurance contributions have impaired entry-level hiring. 

One recruitment specialist, Jo Powell, said that firms are more hesitant to take on juniors or apprentices due to the higher wage bills, leading to smaller businesses reducing levels of recruitment altogether.

Figures have also shown a decrease in interest for vocational training and pathways. The CSJ has reported that the number of young people who move on to apprenticeships after school or college has dropped by about 40% in recent years. However, higher-level apprentices often earn higher salaries than many graduates. 

[The CSJ’s Daniel] Lilley believes developing technical routes would improve job prospects for younger people and fill the vacancies of businesses in key sectors

Daniel Lilley of the CSJ has urged policymakers to reconsider the status quo of higher education being the default choice after school. He argued that technical training, which has often been viewed as the lesser option, has left employers with a shortage of workers with practical skills. 

Lilley believes developing technical routes would improve job prospects for younger people and fill the vacancies of businesses in key sectors.