Graduate Benefit Dependency Skyrockets, Exposing Education System Flaws
The number of university graduates reliant on state benefits has surged dramatically, exceeding 700,000 individuals, with a staggering one in three reporting they are too unwell to seek employment. According to a comprehensive analysis by The Centre for Social Justice (CSJ), approximately 707,000 degree holders were not in work and living off benefits last year.
A Sharp Post-Pandemic Increase in Inactivity
This figure represents a concerning 46 per cent increase compared to pre-pandemic levels. Even more alarming is the more than doubling of graduates citing health reasons as the primary barrier to work, ballooning from 117,000 in 2019 to 240,000 in the latest data. The CSJ, founded by former Conservative leader Sir Iain Duncan Smith, argues these statistics lay bare the consequences of an education policy they describe as 'obsessed' with expanding university participation, often without sufficient consideration for actual labour market demands.
Daniel Lilley, a senior researcher at the CSJ, stated: '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. Both will depend on ending the obsession with university and rewiring education to give technical learning the pride and place it deserves.'
The Apprenticeship Advantage and a Skewed System
The think tank's report highlights a significant imbalance in the UK's post-18 education landscape. Analysts found that for every three young British people choosing a university course, only one pursues vocational training. This contrasts sharply with systems in nations like the Netherlands, where the ratio is two-to-one, and Germany, where it is one-to-one.
Despite the clear financial benefits of apprenticeships, starts for under-19s have plummeted by 40 per cent since 2014/15. CSJ analysis reveals that higher-level apprentices now out-earn the average graduate. Five years after qualifying, a Level 4 apprentice earns nearly £12,500 more than a graduate from a low-value university course and approximately £5,000 more than the average graduate.
The data is stark: the bottom quartile of graduates earn about £24,800 five years after graduation, compared to £37,300 for a Level 4 apprentice. The CSJ estimates that half of all university students starting each year could have been financially better off opting for a higher-level apprenticeship, avoiding student debt while moving directly into skilled employment.
Government Response and Broader Context
A Government spokesman responded, outlining current initiatives: 'We are determined to support young people into work and gain the skills they need to succeed. Through our new Jobs Guarantee, we're helping young people who are out of work find paid placements, with employers such as E.ON, JD Sports, Tesco and TUI having already pledged their support.'
The spokesman added: 'We're investing £1.5bn to get hundreds of thousands of young people earning or learning – including through an expansion of apprenticeships and training. We've also commissioned the former Health Secretary Alan Milburn to lead a review to get to the root of what's holding the younger generation back, because we believe in tackling this complex issue with urgency.'
This crisis unfolds against a backdrop where the full-time employment rate for graduates has slipped from 61 per cent to 59 per cent. Recent data released to Parliament found 639,000 people with an honours degree claiming Universal Credit, meaning graduates now constitute nearly 12 per cent of all claimants—a proportion only four percentage points lower than those with no qualifications.
While graduates are still more likely to be employed than non-graduates (88 per cent versus 68 per cent), the narrowing salary gap is a growing concern. The median real-terms salary for graduates under 65 stands at £26,500, with more graduates facing earnings close to the minimum wage. These figures have intensified debates around the value of certain degrees and whether the current system adequately equips students with the skills needed for the modern job market.
