Young people on benefits now less likely to find work than over-55s as jobs crisis deepens

Around one in eight people under the age of 24 are economically inactive in the UK

Britain's youth jobs crisis is deepening, with young people on sickness benefits now less likely to find work than those approaching retirement.

Fewer than one per cent of 16 to 25-year-olds claiming sickness benefits move into work each month, new Government figures show, prompting warnings of a growing economic and social crisis.

Work and Pensions Secretary Pat McFadden warned Britain is paying a heavy "human and financial cost" as more young people become trapped in the benefits system.

The latest data shows around 1,600 young people aged 16 to 25 leave sickness benefits for work each month. That is a slightly lower rate than claimants aged over 55.

"When young people are falling, we need to pick them up," McFadden wrote in The Times.

More than one million young people are now not in work, education or training, meaning around one in eight people under the age of 24 are economically inactive.

Former Labour health secretary Alan Milburn, who is leading a review into rising youth worklessness, described the problem as both an "economic catastrophe" and a "moral crisis".

His interim report found many young people are being "abandoned" to long-term welfare dependency, with seven in 10 people claiming health and disability benefits still receiving them 10 years after first signing on.

Mr McFadden said the problem was "long-term and deep seated", adding: "Most young people want to work and they need more opportunity and more education and training for the way the economy is changing."

Incoming Prime Minister Andy Burnham has pledged to make welfare reform and cutting the benefits bill central to his time in office.

Mr Burnham has announced that mayors and local councils will be handed responsibility for helping Britain's "lost generation" return to work.

He has also backed expanding technical education rather than steering all young people towards university.

The government's Youth Guarantee programme has already begun shifting focus towards opportunity, offering 300,000 additional work experience placements, £3,000 hiring incentives for employers recruiting young unemployed people, and 50,000 extra youth apprenticeship starts.

Mr Milburn's report highlighted a stark imbalance in spending: for every pound directed towards employment support, £25 goes on benefits.

Sir Keir Starmer had previously been compelled to drop welfare reform proposals last summer following a backbench rebellion.

Mr McFadden urged politicians and businesses alike to treat the rising youth unemployment figures as a "call to action", emphasising that the problem "has been growing for years, with a human and financial cost which concerns us all".

The Work and Pensions Secretary argued that benefits should serve as "a bridge to participation" rather than a permanent arrangement, stating: "The system should always be there for those who can never work, but for everyone else benefits should be a bridge to participation."

He expressed particular concern about "benefit stickiness", the extended periods young people remain on sickness benefits once enrolled.

A separate review led by disability minister Sir Stephen Timms concluded that Personal Independence Payment was "no longer fit for purpose".

Mr McFadden insisted the government should guarantee young people "a productive and positive future" rather than merely helping them "keep body and soul together".