A government-commissioned review led by former health secretary Alan Milburn is expected to recommend that people under 25 stop receiving Personal Independence Payment (PIP) and the Universal Credit health element, and receive a new Youth Allowance with separate disability support instead. The final report is due to be published on Tuesday, Nov 17.
The problem the review addresses
The Office for National Statistics and the House of Commons Library put the number of 16- to 24-year-olds not in employment, education or training (NEET) at 981,000 in April to June 2026, about 13 percent of the age group and 30,000 more than a year earlier. The figure passed one million in January to March, for the first time since 2013.
The youth unemployment rate was 15.6 percent in June to August, against 14.6 percent a year earlier, with 715,000 unemployed young people, 54,000 more than a year before. The UK-wide rate was about 4.7 percent. Youth employment stood at 3.88 million, a rate of 51.4 percent, and 2.96 million young people were economically inactive.
The Bank of England’s chief economist, Clare Lombardelli, described the gap between young people and the wider workforce as the largest since the early 1990s.
NEET and unemployed are different groups. NEET includes people not seeking work, such as those with long-term illness or disability, mental-health difficulties or caring duties. The Bank of England said about 45 percent of people who are NEET at 24 have never held a job.
The Milburn review found about 45 percent of young people who were NEET in 2024/25 reported a disability, up from 21.1 percent in 2013/14, and identified mental health as a major barrier.
Causes identified
The Bank of England said vacancies are down 14 percent across the economy compared with before the pandemic, 19 percent in accommodation and food services and 46 percent in retail.
Graduate vacancies are down about 7 percent year on year, and summer jobs were at a four-year low. It describes a “low-hire, low-fire” market.
A Bank survey found 29 percent of employers affected by National Living Wage rises said they would cut employment, which is an employer-reported response and not proof of cause. The Bank has also warned that artificial intelligence could remove junior jobs, and cited disrupted schooling and higher school absence after the pandemic.
A Bank survey found 29 percent of employers affected by National Living Wage rises said they would cut employment, which is an employer-reported response and not proof of cause. The Bank has also warned that artificial intelligence could remove junior jobs, and cited disrupted schooling and higher school absence after the pandemic.
What Milburn proposes
Youth Allowance: a standard-rate Universal Credit payment for a single person, with a higher rate for young people living independently, including care leavers. Milburn has acknowledged some people could receive less.
PIP: most under-25s would no longer qualify. They could apply to a locally managed fund for specific costs such as equipment, travel to training or transport to interviews.
Additional Cost Allowance: for people with more significant disability-related costs, payable whether or not they work. Eligibility and amounts have not been set.
Severe lifelong disability: a higher level of support for people who could never reasonably be expected to work.
PIP is not an out-of-work benefit. It can be claimed from 16 by people who are working or have savings, so the change could affect disabled young people in jobs, college or university. The Guardian reported that Milburn intends the changes to cover existing claimants, and on Nov 12 Downing Street declined to rule that out.
The review estimates £8.1 billion a year is spent on key benefits for 16- to 24-year-olds: £4.6 billion on Universal Credit, including £0.8 billion for the health element, and £3.2 billion on PIP. Milburn says the UK spends about 25 times more on benefits than on youth employment support. The interim review found about one in five NEET young people in England gets meaningful employment support, and about 314,000 people aged 18 to 24 in England in 2023/24 were neither working nor studying nor claiming benefits themselves.
On the support side, he proposes personal advisers; Danish-style flexi-jobs with adjustable hours and wage top-ups; job carving, which splits jobs into smaller tasks; and employer subsidies, supported internships and pre-apprenticeships. He projects 440,000 additional work and education opportunities by 2036 and more than £2 billion in extra net income for young people.
Existing schemes
The Jobs Guarantee offers 18- to 24-year-olds on Universal Credit for 18 months up to 25 hours a week of paid work for six months, with more than 90,000 places targeted by 2029. The first cohort started in August, including roles at Boots and OCS. The Youth Jobs Grant, launched on June 30, pays employers up to £3,000 to hire eligible 18- to 24-year-olds who have been unemployed for six months, aiming at up to 60,000 jobs over three years. The government has also announced £100 million over two years for local apprenticeship services and a £2,000 hiring payment for some non-levy employers in England.
Reaction
The Joseph Rowntree Foundation warned the changes could increase poverty. Its senior policy adviser Iain Porter said cutting income for someone already struggling to afford food or transport to college could make it harder to stay in education or find work. Labour MP Bell Ribeiro-Addy said she was uneasy about cutting disability benefits for young people, many of whom are working or studying. Meg Hillier said she was willing to give the proposals a fair hearing. In 2025, Labour revised a package of PIP and Universal Credit changes after opposition from its MPs.
What is next
The 2026 Budget says ministers will respond to the Milburn and Timms reviews before the end of 2026, publish a White Paper in early 2027 and legislate later in 2027.
