• Nearly 1 in 4 people out of work due to ill health are under 35 – underlining the need for government’s employment and welfare reforms 
• Government to consider independent recommendations on partnering with employers to keep young people in work  
• Follows sweeping package of welfare to reforms to unlock work and boost living standards as part of the government’s Plan for Change 

Young people with mental health conditions are nearly five times more likely to be economically inactive compared to others in their age group, according to new analysis published today [Thursday 20 March 2025] by the Keep Britain Working Review.    

1 in 4 people who are Economically Inactive due to ill health, are under 35!

Statistics in the report also show around a quarter of those who are economically inactive due to ill-health are under the age of 35 – illustrating how early barriers are impacting many of those who may be beginning their work journey or developing. 

The findings are part of the review’s Discovery Phase report, as former John Lewis boss Sir Charlie Mayfield examines the factors behind spiralling levels of inactivity, and how government and businesses can work together to tackle the issue.  

The Keep Britain Working Review was announced as part of the Get Britain Working White Paper which set out the biggest employment reforms for a generation to get Britain working and unlock growth as part of the plan for change. It also includes plans for overhauling job centres, empowering mayors and local areas to tackle inactivity, and delivering a Youth Guarantee so all young people are either earning or learning  

Today’s report sets out the economic inactivity challenges facing the UK and how this compares to other countries. It finds that:  

• There are 8.7 million people in the UK with a work-limiting health condition, up by 2.5 million (41 per cent) over the last decade, including 1.2 million 16 to 34-year-olds and 900,000 50 to 64-year-olds   
• These figures show young people (16 to 34-year-olds) with mental health conditions are 4.7 times more likely to be economically inactive than their cohort   
• Those who are out of work for less than a year are five times more likely to return to work compared to those who are out of work longer  

The report also highlights the potential economic benefit of better prevention, retention and rapid rehabilitation: it finds that tackling sickness absence and ill-health related economic inactivity through these measures could be worth £150 billion a year to the economy.  

Chair of the independent review, Sir Charlie Mayfield, said:       

“Our initial report published today confirms the scale of rising economic inactivity and what’s driving it. It underlines the urgency that we tackle this challenge by improving prevention and retention of those in work and by creating better pathways back into work for those who are economically inactive.   

“It’s a problem that can and must be addressed by government and employers together. Even at this initial stage of the review, we have found inspiring examples of employers making a difference that’s literally life changing for some people. We need more of these on a greater scale and, in the next stages of the review, we will be engaging with many organisations to establish how that can be achieved. ” 

Secretary of State for Work and Pensions, Liz Kendall, said:   

“We must do far more to help people stay in work and get back quickly if they fall out. That’s why, as part of the reforms in our Pathways to Work Green Paper and our Plan for Change, we are making a decisive shift towards prevention and early intervention.  

“We want to help more employers to offer opportunities for disabled people, including through measures such as reasonable adjustments, and we are consulting on reforming Access to Work so it is fit for the future.  

“I want to thank Sir Charlie for this report. It shows the potential for what government and employers can do together to create healthier, more inclusive workplaces, so we build on the great work some businesses are already doing.”

Separate research also suggests that if the UK could reduce the number of young people who are not in education, employment or training by a third, to match Germany’s rate, UK GDP could increase by 1.8% in the long-term (equivalent to £38 billion) – underpinning why health and disability reform to get Britain working is central to unlocking growth and delivering on the Plan for Change.  

The government has already hit the ground running on prevention to address the mental health challenges young people are facing and ensure they get the treatment they need. This includes investing £26 billion in the NHS, including in mental health services and recruiting an additional 8,500 mental health workers across child and adult services to reduce delays and provide faster treatment. 

We have already helped almost 70,000 people with mental health issues back into employment last year as part of the expansion of the Talking Therapies programme, up more than 60% on the year before and we are continuing to expand the programmes so more people can benefit from treatment.  

The report sets out the main areas for the next stage of engagement – where in the coming months written submissions and face-to-face engagements with businesses and stakeholders will gather evidence to develop recommendations to come in Autumn.  

The government has also put in place measures to make work pay and more secure, to help keep more people in work and support employers with retention. 

This includes through the Employment Rights Bill which will strengthen workers’ rights protections, including expanding Statutory Sick Pay to 1.3 million of the lowest earners who previously received nothing, ensuring employees have the right to payments from the first day they are ill – so no one has to choose between their health or staying in work.  

We are also increasing the National Living Wage from April, benefiting 3 million of the lowest paid full-time workers by up to £2,500 and introducing a Youth Guarantee to ensure every young person is either learning or earning.  

This Discovery report comes as the Work and Pensions Secretary set out the largest welfare reforms for a generation this week to help those sick and disabled people who can work into jobs – backed by £1 billion investment.  

This includes consulting on delaying access to the health top up in Universal Credit until someone is aged 22, with savings reinvested into work support and training opportunities through the Youth Guarantee.  

These range of measures also include scrapping the controversial Work Capability Assessment that drives people into dependency and introducing the biggest package of new employment support including an early support conversation to stop an inactivity spiral.    

The new measures are designed to ensure a welfare system that is fit for purpose and available for future generations – opening up employment opportunities, boosting economic growth and tackling the spiralling benefits bill, while also ensuring those who cannot work get the support, they need as part of the government’s Plan for Change.  

This will end years of inaction, which has led to one in eight young people not currently in work, education or training and 2.8 million people economically inactive due to long term sickness – one of the highest rates in the G7.   

All this has driven the spiralling benefits bill, forecast to reach £70 billion a year of spending on health and disability benefits for working age people by the end of the decade, or more than £1 billion a week.

Sector Reaction

Recruitment and Employment Confederation (REC) Director of Campaigns Shazia Ejaz said:

“The UK faces a twin youth crisis: one inside the workplace, with younger workers more likely to be laid off by employers managing rising minimum wages and higher employment taxes; and one outside, with high levels of 16–24-year-olds not in education, employment, or training (NEET). The government’s goal of achieving growth must include tackling this. And that means avoiding policies that price young people out of their first jobs, such as unnecessarily broad reforms to the labour market that exacerbate the already inflated costs of doing business.

“Quicker progress on the work of Skills England to get more people into the right apprenticeships and vocational training will help, as will tax incentives to support employers to invest more in employee support programmes for staff.”

Ben Harrison, Director of the Work Foundation at Lancaster University, said:

“The findings of the Keep Britain Working Discovery Report from Sir Charlie Mayfield provide an important reminder that ambitious reforms will be required to stem the flow of those suffering with ill health leaving the labour market.

“With rising levels of work-limiting conditions, our longitudinal analysis has shown that early intervention and flexibility are key to supporting workers with health conditions to remain in work. Nearly one in ten employees (9%) who had experienced a decline in health had left work within four years – and half of those were within the first year. In addition, workers without flexibility in their job roles were four times more likely to leave work after a health decline.

“As Sir Charlie points out, some UK employers are opting to let workers with ill health leave and find a new replacement rather than attempt to retain them. The Keep Britain Working Review must seek solutions to address this. Our research has found an ‘awareness to action gap’ amongst UK employers when it comes to addressing ill health at work – many recognise the challenge but cite insufficient resources to act.

“Other comparative nations take very different approaches that the Review can draw inspiration from. For example, employers in the Netherlands are mandated to provide sick pay of at least 70% of worker’s wages for up to two years of an absence and provide rehabilitation programmes – keeping workers linked to employment for longer.

“The report rightly points out the specific challenges facing different worker groups, including young people. The review should focus on how employers could be incentivised to support workers, such as through an extended employer duty of care, subsidising the cost of long-term sickness absence, and supporting additional vocational rehabilitation.

“If this review is to be truly successful and help support the Government’s economic growth ambitions, it must be the start of a national reset on workforce health supported by both Government and employers.”

Ben Willmott, head of public policy for the CIPD, comments:

“Today’s report shows we need more ambition from the Government to tackle health-related inactivity and create more opportunities for young people to be supported into sustainable employment. The Youth Guarantee is a positive step but not sufficient to tackle the collapse in apprenticeship provision for young people in recent years and the lack of effective employment support to underpin pathways into work. Our research shows there is strong employer backing for a broader Apprenticeship Guarantee which would provide a guaranteed apprenticeship place for young people aged 16-24. Better training and employment opportunities for young people will also support efforts to improve their mental health and wellbeing.

“The Government must provide strong backing to the Keep Britain Working review and be prepared to invest, for example, to improve the provision of occupational health support to SMEs to keep people healthy and in work. Improving health at work and retention are also likely to require an increased focus by the Health and Safety Executive on tackling work-related stress, which is linked to mental health conditions like anxiety and depression, as well as increased risk of heart disease. The economic benefit of focusing on prevention and tackling sickness absence to reduce ill-health related economic inactivity is huge.

“It’s also important that the Government continues to consult with employers as details on some of the key measures in the Employment Rights Bill are finalised, to ensure they don’t have the effect of deterring employers from hiring candidates with health conditions or more development needs.”

Elizabeth Gerard, Deputy Director at Learning and Work Institute (L&W), said:

“The Keep Britain Working Review, led by Sir Charlie Mayfield, has reiterated the significant challenge of economic inactivity in the UK, and the potential prize of breaking down barriers to opportunity for young people. The scale of action required is highlighted in new data today showing one in four young people who are not in education, employment or training (NEET) are economically inactive due to sickness. Our research indicates poor mental health is a key driver. Further analysis from L&W published in early April will help to inform delivery of the Youth Guarantee and partnership between Government and employers to support young people across the UK.”