One in six young people will not be in education, employment or training within five years unless "urgent" action is taken, a major review has warned.
The education, health and welfare systems are "no longer fit for purpose" in preparing young people for adult life, said its author former minister Alan Milburn.
"We are at risk of a lost generation," he warned, with the number of 16 to 24-year-olds out of work, education or training set to rise to 1.25 million by 2031.
The "first rung of the career ladder has thinned" and that for "too many young people it is now simply out of reach", Milburn is set to say in a speech later.
"That places them in a hopeless catch-22 where employers ask for work experience but the opportunities for young people to gain it have narrowed or gone," he will say.
There are growing concerns over the number of young people not working. Latest figures show the unemployment rate for 16 to 24-year-olds is 16.2%, the highest since 2014, and more than three times the broader unemployment rate of 5%.
Milburn was tasked with investigating why so many young people are not in employment, education or training - known by the acronym Neets.
According to the latest official UK figures, there were 957,000 young people classed as Neet from October to December 2025, equivalent to one in eight people in that age category.
More than half of those were deemed to be not looking for work.
Milburn warned that number could rise to 1.25 million, or one in six young people, in the next five years unless action was taken.
Work and Pensions Secretary Pat McFadden said he commissioned the report to save a generation of young people from unemployment, welcoming its findings.
"We are already taking action," he said, highlighting the government's plans to pay companies to hire young people and its moves to create more apprenticeships.
McFadden also said the government is focusing on "early intervention" measures such as special educational needs support and the removal of the two-child cap on benefits. "But we know there is more to do," he added.
The findings from the former Labour health secretary's review have been heavily trailed. He told the BBC's Laura Kuenssberg that the government spends 25 times as much on benefits for young people than it does on supporting them into work.
However, in his interim report, he challenged the narrative that young people do not want to work, saying that 84% of Neets surveyed said they want a job or training.
He argues young people are not to blame for the youth unemployment crisis.
"This is not a failure of young people. It is a failure of a system stuck in the past. Whether it is education or health or welfare, that system fails to enable their participation in the labour market," he is expected to say in a speech later.
"Instead, all too often it ends up putting young people on a path to a life not in jobs but on benefits. This should be the priority for the government. It should be the priority for all of us."
Zaynah, 24, has suffered from physical ill health and has not had a job since leaving college. Over the past year, she has applied for more than 200 jobs but said she never heard back from any of the employers.
"Getting a job is very hard because with my issues, I haven't got that much experience, I've never worked before," she added.
"So I feel like it's restricting me and I'm not getting jobs.'' She said she was planning to start doing some volunteering so she can improve her CV.
Luke, who studied product design at the prestigious Central St Martin's University, cannot find a job despite trying hard.
The 23-year-old has applied for more than 400 positions and has only ever had one interview as a cleaner which he did not get.
''It's humiliating," he said. "You think 'okay I've got all the knowledge, I've got all the skills, all I'm waiting for is a job to put it in practice'.
"It makes you depressed especially the amount of rejections." He said he had no choice but to claim benefits.
Meanwhile Rocky had been out of work for a year before he joined Nando's as a waiter. Three years on he is now an assistant manager.
Written off at school, he now cannot believe how things have turned out for him.
"I'm 23 years old and I'm a manager at Nando's," he says. "I feel happy with myself. I can look back and tell my doubters that I made it.''
He said he would not have progressed without mentoring by a manager at Nando's and ongoing support from the youth charity Spear.
The report found in 2024/25, for every £1 spent on employment support for young people, around £25 was spent on benefits.
It also said the number of low-and medium-skilled jobs in the UK had fallen by 1.6 million in the past 20 years, while the number of higher-skilled positions has risen by 6.3 million.
High street retailers and hospitality businesses such as restaurants, cafes and pubs often offer the first experience of work for many young people.
But in the hospitality sector vacancies have halved in the past four years.
The boss of Next, Lord Simon Wolfson, told the BBC this week that just two years ago, the retail giant typically received 10 applications for every shop vacancy, but that number had since risen to 19.
Rain Newton-Smith, the chief executive of the Confederation of British Industry, said the report exposed "a tragic waste of potential and sets out the key problems that must be fixed".
"Reducing the high cost of creating jobs in the UK would open up more opportunities," she claimed.
Some employers have argued it has become more difficult to hire young people due to higher minimum wages and increased taxes, such as employer National Insurance contributions.
The government has defended its decision to raise taxes on business and increasing the national minimum wage.
Last year, Prime Minister Sir Keir Starmer U-turned reforms to welfare spending that aimed to save £5bn a year by 2030 after facing a rebellion by his own Labour MPs.
The review does not include potential solutions to the crisis, but these will come at a later date in a final report.
The Conservative Party said Labour is too focused on its own internal leadership speculation to deal with the "generational crisis" Milburn warned of.
Shadow Work and Pensions Secretary Helen Whately said: "Every policy choice Labour has made, from their jobs tax, capping apprenticeship funding, or trapping young people on welfare, has made it harder for a young person to take their first step into work.
"Their only answer has been a flurry of piecemeal work programmes – an approach this report rubbishes."
