Unemployment: Who are the millions of Britons not working?

A young woman
[BBC]

About a quarter of people of working-age - nearly 11 million people - do not currently have jobs.

In his March Budget, Chancellor Jeremy Hunt set out a series of measures designed to encourage people to find work, or increase their hours.

How many people are unemployed?

According to the Office for National Statistics (ONS), 4.4% of people were unemployed in the period between February-April 2024 - up from the previous figure of 4.3% and the highest rate since September 2021.

That's about 1.5 million people.

UK unemployment (June 2024)
[BBC]

While there has been an increase in recent months, unemployment remains relatively low historically.

But the unemployed represent only a small part of the nearly 11 million working-age people (aged 16-64) who were not in a paid job in 2023.

About 9.4 million of them are not called "unemployed". That is because they were not actively looking for work, or available to start a job.

Instead these people are called "economically inactive".

In fact, more of them said they wanted a job (1.7 million people) than are officially unemployed (1.44 million).

Who isn't working - and why?

It varies according to age.

ONS figures for 2023 show that most of the 2.7 million "inactive" under-25s were students. The majority of them did not want a job.

You can see that in the graphic below. Click on the darker border surrounding any age group to see the spilt between men and women.

Things are different in other age groups.

The main reasons that 3.5 million over-50s were out of the job market were illness and early retirement. Almost nobody who retired early said they wanted to return to work.

Among 25- to 49-year-olds, 1.1 million people did not work because of caring responsibilities (about a million of whom are women).

Nearly one million people in this age group were not working because of illness (more evenly split between men and women).

A man in a wheelchair reads a letter at the kitchen table
[Getty Images]

Around half of people with disabilities did not have a paid job, a rate that is more than double the rest of the working-age population.

Less than a quarter of those who were sick or caring said they wanted a job.

Does it matter that people aren't looking for work?

Many people have chosen to do something else: studying, caring or retirement.

But for others it is not a choice.

Some people cannot afford childcare if they return to work, others are too sick, or have given up on finding a job.

As the chart below shows, sickness and caring responsibilities were the most common reasons for inactivity given by those who actually would like a paid job.

Bar chart showing that five hundred ninety thousand economically inactive people who want a job are sick while twenty-seven thousand are retired
Chart on the reason inactive people wanting to work don't [BBC]

The number of people not working has a broader effect.

A smaller workforce means less tax to pay for services like the NHS, and greater spending on benefits.

Since people on benefits generally have less money to spend than those in work, it also means less spending on the high street.

That in turn is bad for businesses and how many people they need to employ.

In turn, that can affect how many jobs are available for those who are job hunting.

How does the UK compare with other countries?

The UK's "inactivity" rate is back up to the levels seen in 2015.

It is low by historical standards, as each decade more and more women have been joining the workforce. But the recent trend is unusual.

During the Covid pandemic, all major countries saw their workforce shrink.

But while the other leading economies have since recovered, the UK still has more people out of its workforce than in 2019 - by over 1% of the working-age population.

The inactivity rate in the UK has increased by over 1% since the pandemic while all other G7 countries have experienced improvements
G7 comparisons in inactivity since the pandemic [BBC]

Before Covid, the UK's inactivity rate was second lowest in the G7 club of leading advanced economies, with only Japan's lower.

The increase in inactivity shown above puts the UK fourth out of seven, overtaking Germany and Canada but still below the US, France and Italy.

The Office for Budget Responsibility suggests that the drop since the pandemic that distinguishes the UK is due to ill-health being consistently "a bigger factor" in the country than in the other advanced economies.

What can be done to get more people into work?

The government announced a series of reforms in the Budget to help some people get jobs or increase the hours they work. The measures were particularly aimed at:

  • current workers

  • working parents receiving child benefits

  • those that are self-employed

  • people claiming disability benefits

These included cutting the rate for national insurance contributions, extending free childcare to ensure single-earner households aren't disadvantaged, and offering more support to help disabled people find paid employment.

Broadening the pool of people given support to return to the job market is key, experts argue.

Data visualisation by Callum Thomson, additional reporting by Nicholas Barrett