UK Youth Hiring Costs Jump 40% as Minimum Wage Rises Fuel Worklessness Crisis

The real statutory cost of employing an 18-year-old in the UK is approximately 40% higher in 2025 than in 2015, according to a Tony Blair Institute report that warns inflation-busting minimum wage increases are driving youth worklessness. The 18-year-old minimum wage climbed from £5.13 to £10.00 between 2015 and 2025 — a 41% real-terms increase. The current rate is £10.85, or 85% of the adult rate, compared with 50% in the Netherlands, which has one of Europe's lowest Neet rates. The think tank urged Labour to introduce tax breaks for employers hiring younger staff, including phasing in employer National Insurance contributions through workers' early 20s, and called for an "emergency brake on benefits" for certain mental health conditions. Nearly one million young people are not in employment, education or training, with 44% having no contact with the benefits system. Royal Mail, Octopus Energy, Greene King, Lloyds Banking Group and NatWest have joined a initiative to create more first jobs and apprenticeships.