Here's why young people could lose their benefits under Labour's new plans
As the government prepares to unveil a package of measures for the benefits system on Tuesday, some young people are at risk of losing their payments.
Young people face losing their benefits if they refuse to take up work and training opportunities, work and pensions secretary Liz Kendall has said.
It comes as Labour intends to stick to a commitment made by the previous Tory administration to reduce the nation's welfare bill by £3bn over five years, with the government promising a "radical" overhaul of the benefits system with the aim of getting more people back into work.
Speaking to Sky News' Sunday Morning With Trevor Phillips, Kendall said claimants have a “responsibility” to engage with skills or employment programmes and will face sanctions if they decline to do so as part of reforms to be set out next week.
Referring specifically to young people, the Cabinet minister said the government would “transform” opportunities with a “youth guarantee” as part of the reforms, but they would in turn be “required to take them up”.
Speaking to the BBC's Sunday with Laura Kuenssberg programme, she said the government would overhaul the system so that for young people, "everyone has a chance to be earning or learning", but said that "in return", they would have a "responsibility" to take up these opportunities.
Here, Yahoo News explains what we know so far about the government's incoming changes to benefits and how it could affect young people.
What do we know about Labour's benefits overhaul?
Under the previous government, welfare eligibility would have been tightened so around 400,000 more people signed off from working long-term would be assessed as needing to prepare for work by 2028/29 to deliver the savings.
One might assume that this figure would still stand if the new Labour administration intends to stick to the Conservatives' previous pledge.
However, facing broadcasters on Sunday, Kendall refused to be drawn on how specifically Labour will cut costs ahead of announcing a package of legislation next week, saying only the government will introduce its own reforms.
Asked if 400,000 people would lose their current benefits, she told Kuenssberg: “I’m saying we will bring forward our own reforms. You wouldn’t expect me to announce this on your programme."
Kendall will set out a package of measures on Tuesday designed to “get Britain working” amid government concerns about the projected rise in claims, which she puts down to Britain being an "older and sicker nation".
Her white paper is expected to include the placement of work coaches in mental health clinics. The minister's plans are also expected to include a “youth guarantee” aimed at ensuring those aged 18-21 are working or studying.
In a column for the Mail On Sunday, prime minister Sir Keir Starmer writes: "Make no mistake, we will get to grips with the bulging benefits bill blighting our society... we will crack down hard on anyone who tries to game the system, to tackle fraud so we can take cash straight from the banks of fraudsters."
The PM's rhetoric has angered some MPs, including Labour's Diane Abott, who accused him of “peddling benefit scrounger mythology”.
How many young people are out of work?
Between July and September 2024, there were 627,000 young people aged 16 to 24 who were unemployed – 128,000 more than the previous year, according to Parliamentary research published in November. This represents a fall in the unemployment rate for young people from 12.1% to 14.8%.
During this same period there were 3.60 million young people aged 16 to 24 in employment, which is 46,000 less than the previous year. The employment rate was 50.0%, down from 51.3% the year before.
The report adds that there were 2.96 million young people aged 16 to 24 who were economically inactive – a broader definition covering people who aren't looking for work. This is 10,000 more than the previous year and the highest rate since current records began in 1992.
The research briefing notes that there has been an increase in young people who are economically inactive due to a long-term illness. Mental health appears to be a primary reason for this rise, with the number of young people economically inactive due to a long-term mental health condition rising by 20,000 (24%) between 2019 and 2022.
The number of people classed as economically inactive across all age groups stands at around 9.4 million.
How many young people are receiving health-related benefits?
The government's latest official forecasts show that across the board, there were just over three million people claiming incapacity benefits. It is expected to climb from around 2.5 million in 2019 to 4.2 million in 2029.
A report from April by the Institute for Fiscal Studies (IFS) suggests a great proportion of younger people are now taking up health-related benefits, with the share claimed by 25 year olds rising from 4.9% to 7% since 2019.
The IFS adds: "A 20-year-old today is about as likely to claim a health-related benefit as a 39-year-old was in 2019; a 35-year-old today is about as likely to claim as a 46-year-old in 2019; and a 55-year-old today is about as likely to claim as a 60-year-old in 2019."
Mental health and behavioural disorders are the "primary condition" affecting benefit recipients, accounting for 41% of claimants, but this appears to be weighted more towards the young.
This proportion rises to 69% among 25-year-old claimants, compared to just 22% for 55 year olds, the IFS says.
"Before the pandemic, around one in thirteen were claiming a health-related benefit. That is now set to rise to one in eight by the end of the decade," it added. "This matters as the growth in poor health and disabilities increases the likelihood of people being locked out of the workforce, at a time when the UK faces acute labour shortages."
Mental health self-diagnosis fuelling benefits bill, Kendall says
Asked how, according to the IFS, the number of working-age people on health-related benefits has risen by a million since 2019, Kendall said a "combination of factors" were at play.
She told Kuenssberg: "I do think we are seeing an increase in the number of people with mental health problems, both self-diagnosed – I think it’s good that stigma has been reduced – but also diagnosed by doctors.
“We’re also seeing more people in their 50s and above, often women, with bad knees, hips, joints. We’ve got a real problem with our health service.”
Asked whether she believed that “normal feelings” were being “overmedicalised”, Kendall said: “I genuinely believe there’s not one simple thing. You know, the last government said people were too bluesy to work.
“I mean, I don’t know who they were speaking to. There is a genuine problem with mental health in this country.”
