Ministers are considering additional financial support for families on benefits whose teenage children take up apprenticeships, aiming to mitigate the loss of welfare payments when young people leave full-time education at 16 or 17.
Welfare Penalties for Apprenticeships
The Social Security Advisory Committee highlighted last month that families can face “substantial losses” in welfare payments, ranging from approximately £17 to over £300 per week. These losses, the committee warned, “can reach levels that no realistic apprenticeship wage can offset,” undermining government efforts to encourage apprenticeships.
Dr Stephen Brien, chairman of the committee, stated that the welfare system can “penalise families when young people take up apprenticeships, even though this is a route that government actively encourages.” The Times reports that the government is now exploring targeted bursaries, though no final decision has been made.
Alan Milburn's Report on Youth Unemployment
This development precedes a major report by former Labour Health Secretary Alan Milburn, due this week, addressing the crisis of young people not in education, employment, or training (Neets). Milburn criticised the state for “shamefully” failing young people by directing them onto benefits rather than into work. He told the BBC: “For every £25 that we spend keeping young people on benefits, we spend only £1 helping them get into work through employment support.”
Milburn added that the failure spans the welfare, school, skills, and health systems. Recent ONS data shows 12.8% of 16-24 year olds (957,000) were Neets in October-December 2025.
Government Initiatives
Work and Pensions Secretary Pat McFadden has announced plans for an extra 300,000 work placements over three years, with sector-based work academy programmes (SWAPs) improving long-term prospects. Participants are 13% more likely to be in work after two years compared to similar Universal Credit claimants who did not participate.
McFadden described the Neet situation as “a quiet crisis, a ticking time-bomb, which risks their future working lives,” particularly for young people without family connections. A DWP spokeswoman said: “We are determined to reverse the 40% drop in young people starting apprenticeships over the last decade. To give every young person the best start in their career, we are investing £2.5billion to tackle youth unemployment, and creating 50,000 additional apprenticeships for young people.”
