The government announced A Youth Jobs Grant that will pay businesses to hire young people aged 18-24 who are on benefits and have been out of work for six months or more.
Businesses will get £3,000 for each employee. The government is attempting to tackle rising numbers of NEET (not in employment, education or training) young people, with figures reaching 957,000 in October-December 2025.
It’s hoped that the scheme will help 60,000 young people to get into work over the next three years.
How do I qualify for the Youth Jobs Grant?
The government is still to lay out how it will do this in future.
What other measures are coming in?
There were a couple of other announcements you should know about. Work and Pensions Secretary, Pat McFadden, also said:
A similar scheme, the Jobs Guarantee, is going to become broader. From Autumn 2026, the upper age limit will extend from 21 to 24, with the aim of adding 35,000 extra subsidised jobs. This means that SMEs will get paid for hiring a benefit claimant who’s been looking for work for 18 months, as long as they’re 18-24.
Government-supported apprenticeships will expand to hospitality and retail. This will give employers up to £2,000 for taking on 16-21-year-olds as apprentices.
Reactions to the Youth Jobs Grant
As with most government announcements, there’s a mixed bag from the business world.
Tina McKenzie MBE, policy chair of the Federation of Small Businesses, is generally supportive:
“This is a game-changer to tackle youth unemployment and inactivity, which FSB has campaigned about as levels remain stubbornly high after the pandemic. Creating good opportunities for young people is absolutely crucial – for individuals themselves, for small businesses and for local economies and people. The new incentives announced today are a clear and decisive step forward – helping small firms to hire those on Universal Credit and to create apprenticeships.
“It’s the right choice to prioritise public funding to back small employers in particular to provide apprenticeships for young people. The UK can’t afford a lost generation amid rising employment costs, therefore we’re pleased the Government has listened carefully on this and stepped up with this pro-jobs, pro-opportunities package.”
Julia Evans, head of media and communications at the youth employment charity, Spear, has concerns about the scheme’s efficacy: “We welcome the government’s focus on tackling the high numbers of young people not earning or learning. But we don’t think it’s as simple as ‘if you build it, they will come’.
“We know that, with the right support, young people can thrive and become successful and loyal employees.
“There’s a feeling among the employers we work with that putting young people straight into job placements without training and support beforehand isn’t ideal either for the employer or for the young person – their confidence could be damaged further if it doesn’t work out well.
“Most young people start on the Spear Programme after months of being out of work and a string of job rejections. Some struggle to look anyone in the eye or have the confidence to talk to people. Our coaches challenge their mindset as well as working on practical skills. It works: over 70 per cent of those who complete Spear are in work or study a year later.
“A business could easily spend £3,000 just on hiring someone. Might it be better spent on getting young people work-ready first to ensure they’re equipped to thrive in a job?”
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