Over 700,000 university graduates are now out of work and claiming benefits, according to new analysis.
The research by the Centre for Social Justice raises fresh questions about Britain’s long-standing assumption that university should be the default route for young people.
The findings, drawn from analysis of the Labour Force Survey and Department for Work and Pensions data, show that graduate joblessness is significantly higher than previously reported as more degree-holders are ending up at the jobcentre.
Around 400,000 graduates are currently out of work and claiming Universal Credit, while 110,000 graduates under the age of 30 were found to be claiming at least one benefit and not in work.
Almost 240,000 of the 700,000 jobless graduates claiming benefits said they were off work due to sickness.
The CSJ’s analysis reveals a sharp increase the prevalence of graduates turning to welfare.
The total number of graduates out of work and on benefits increased by 46 per cent since 2019, while graduates off work due to sickness and claiming benefits more than doubled over the same period (rising by 105 per cent).
The think tank, founded by Sir Iain Duncan Smith, says the figures expose the consequences of an education system that has been “obsessed” with expanding university participation without sufficient regard to labour market demand, earnings outcomes or routes into skilled work.
Its new report, Rewiring Education, argues that Britain’s education system is profoundly unbalanced and needs to be comprehensively rewired.
It warns that treating technical education as a second-class path has left both the education system and jobs market badly distorted, with many graduates chasing unattainable jobs as employers struggle to recruit people with practical and technical skills.
The report is backed by major cross-party figures including Andy Burnham Rt Hon. the Lord Gove , Munira Wilson MP (Lib Dem) and Danny Kruger MP (Reform)
Analysts found that for every three British young people opting for a university course, just one receives vocational training. By contrast, in the Netherlands this ratio is two-to-one, and in Germany one-to-one.
Meanwhile, under-19 apprenticeship starts have fallen by 40 per cent since 2014/15, despite CSJ analysis showing that higher level apprentices now out-earn the average degree.
Five years after qualifying, a higher level (Level 4) apprentice earns almost £12,500 more than a graduate from a low-value university course and £5,000 more than the average graduate.
The bottom quartile of graduates were found to earn £24,800 five years after completing their course, compared with £37,300 for a Level 4 apprentice. Even lower level apprentices were found to earn as much as or more than graduates from lower-value degrees.
The CSJ estimates that half of all university students starting each year could have been financially better off taking a higher level apprenticeship instead, avoiding debt while moving directly into skilled employment.
The report also highlights how the expansion of low-value degrees has fed wider problems across the economy and welfare system.
Thirty-seven per cent of UK graduates are over-qualified for their jobs, the highest rate in the OECD. Almost one million young people are not in education, employment or training, while under-25 employment among non-EU nationals has risen sharply as the number of young British nationals in work has fallen.
