NEET Rates and The Case for Place-Based Preventative Action

The challenge of young people not in education, employment, or training (NEET) is both a social challenge and a critical economic issue. NEET rates are composed of two groups: unemployed, who are actively looking for work, and economically inactive, who are not looking for work. Nearly one million 16-24 year olds in the UK are NEET, and 61% of those young people are economically inactive. This has costly consequences; it is estimated that a person leaving the workforce in their 20s can lose more than £1 million in earnings and pensions, and if the UK matched the Netherlands’ NEETs rate (1 in 20 young people are NEET in the Netherlands compared to 1 in 8 in the UK) it could boost the economy by £86 billion.  

To reduce NEET rates and achieve inclusive growth, place-based, preventative action is needed. Supporting interventions which target local barriers, reach those facing multiple disadvantages, and integrate education, employment, and health services are crucial in making local systems more responsive. 

NEET rates among 16-24 year olds were falling prior to and during the COVID-19 pandemic. However, by mid-2025, they had returned to 2015 levels. Compared to 2015, a larger proportion are now economically inactive as opposed to unemployed and health-related barriers account for a growing share of the total. This suggests that new policy approaches are needed.  

NEET rates are in the spotlight as the government has announced an independent investigation into youth inactivity. The government has also introduced a range of policies aimed at reducing NEET rates, including the 16-19 Bursary Fund, the Youth Jobs Grant, and commitments to a Youth Guarantee, as well as the establishment of trailblazer areas to pilot these initiatives. While these changes reflect recognition of the problem, eligibility thresholds, delayed intervention, and limited local flexibility raise questions about whether they go far enough.

Three key topics that should be considered when addressing the youth employment gap include: compound disadvantage, health and place.

Compound disadvantage

Targeting interventions at those facing multiple, overlapping disadvantages is essential for effective place-based prevention and for supporting inclusive growth. Young people are not a homogenous group, and disadvantages are not evenly distributed, and often overlap. Research conducted by Impetus identified a “triple jeopardy” of compound disadvantage:

• Young people who are eligible for free school meals in Year 11 are 66% more likely to be NEET than average.
• Those with low qualifications (below a level 2 qualification) at age 18 are 77% more likely to be NEET than average.
• Those with Special Educational Needs and Disabilities (SEND) are around 80% more likely to be NEET than average.

Economic growth alone does not automatically open doors for young people and targeted pathways are required to address the root causes locking young people out of opportunities. 

Health-related barriers

Poor health is a structural barrier that constrains economic participation. Over a quarter of NEET young people are economically inactive because of health conditions. The Keep Britain Working review uncovered that since 2019 there has been a 76% increase in economically inactive 16-24 year olds due to mental health conditions.  

The proportion of NEET young people reporting a health condition has risen over the past decade. This shows that the current NEET challenge is part of a wider picture, and one structural component is linked to health-related barriers, which may require different policy responses from those aimed purely at increasing labour demand.

Preventative approaches that support mental health are crucial to having long-term economic payoffs. Health and the economy must be treated as intertwined systems: designing place-based interventions that integrate mental health support, employability services, and progression pathways.  

These findings strengthen the case for giving local and combined authorities greater flexibility to align post-16 skills provisions with local demand. Suggested interventions include stronger employer engagement to introduce young people to workplaces and role models; short, accessible training courses to encourage rapid upskilling in sectors where demand exists locally; and providing affordable, reliable transport to young people to access education, training, and work.