In a new report, supported by Sage, we examine how young people’s routes into work have changed since 2022. Drawing on 2.2 million Sage payroll records from 111,700 UK businesses, analysed by Cebr alongside official data, we find that the number of employees aged 16 to 24 fell by 129,200 between 2022/23 and 2025/26, even as the wider workforce grew.
Over the same period, more young people started working for themselves. Around 193,000 are now self-employed, 27,500 more than in 2022/23. Yet government support for young people out of work is built around employee jobs, and there has been no dedicated self-employment route since the New Enterprise Allowance closed in 2022. Helping 5% of NEET young people into self-employment could add £4 billion to the economy by 2029.
To fix this, we set out three recommendations to make starting a business a recognised route into work, alongside apprenticeships and graduate schemes: a pilot Startup Allowance for under-25s built around mentoring, a £3,000 Youth Enterprise Grant to match what employers receive under the Youth Jobs Grant, and a youth strand of Help to Grow focused on using AI to start and run a business.