The case for helping hidden NEETs

Hidden NEETs may not be a priority, but they could benefit from employment support

New analysis from the Institute for Fiscal Studies challenges the assumption that so-called ‘hidden NEETs’ may be one of the most troubling findings of the interim Milburn Review.

The latest wave of the Millennium Cohort Study identified nearly 900,000 young people aged 18 to 24 in Great Britain who were not in education, employment or training at the end of 2025. Around 300,000 of them were not claiming benefits.

These hidden NEETs are young people who are out of work and learning, but also largely beyond the reach of the state. However, they are not necessarily the most disadvantaged or furthest from employment.

Hidden NEETs are generally closer to the labour market than NEETs receiving benefits. Among those aged 22–23, 74% are actively looking for work and 57% have been out of employment or education for less than six months, compared with just 16% of benefit-claiming NEETs. They are also considerably better qualified: 54% have a degree, broadly matching young people in employment or education, compared with only 12% of NEETs on benefits.

Hidden NEETs are around half as likely to report a disability, poor physical health or poor mental health, and are less likely to experience long-term unemployment. This suggests that most have relatively strong prospects of finding work,

Many are supported by their families. Four in five live with their parents, while 37% come from households in the top third of the income distribution. That does not mean their position is unproblematic, but the hidden-NEET population is different from the group most commonly associated with long-term economic inactivity and benefit dependency.

Reducing the number of hidden NEETs will not reduce the welfare bill. Since these young people are not receiving benefits, moving them into work produces no immediate saving in benefits. Indeed, extending publicly funded employment support to them would initially cost the Exchequer more.

That is not a reason to do nothing. It is an argument for being clear about what we are trying to achieve.

The case for helping hidden NEETs is primarily about improving employment, productivity and life chances - not securing an immediate reduction in public spending. A prolonged period outside work or education can erode skills, confidence and professional networks. It may also increase the likelihood that a young person eventually becomes dependent on public services or benefits. Early intervention therefore has economic and social value, even where it does not generate a quick saving for the Treasury.

The problem is that access to employment support is too often tied to benefit receipt. Young people who claim Universal Credit may receive help from a work coach and become eligible for programmes within the Youth Guarantee. Those supported by their parents can remain invisible, irrespective of how long they have been out of work.

This creates an obvious anomaly. The IFS finds that 43% of hidden NEETs aged 22 and 23 had been out of work or education for more than six months, while 19% had been NEET for more than 18 months. They therefore meet the duration thresholds used by the Youth Jobs Grant and Jobs Guarantee but remain ineligible because those thresholds are measured through benefit claims.

Government should separate access to employment services from entitlement to income support. Young people should not have to claim benefits simply to obtain careers guidance, job-search assistance, skills assessments, training brokerage or contact with employers. Eligibility could instead be based on a verified period without earnings or participation in education, although this would require better coordination between employment, tax and education records.

The IFS is right to caution against building an expensive national bureaucracy to identify and track every hidden NEET. Many are in temporary transition and will find work without government intervention. Support should therefore be voluntary, accessible and proportionate, with more intensive help directed towards those who have been disengaged for six months or longer.

The NEET crisis, low educational attainment and the rising welfare bill are overlapping challenges, but they are not the same problem. Judging success solely by reductions in benefit spending will leave hidden NEETs overlooked, while treating the issue primarily as a skills deficit will fail to address the immediate barriers preventing young people from entering work.

Qualifications matter, but so do access to employment support, meaningful work experience and direct connections with employers. The objective should be broader than reducing welfare dependency: it should be to help every young person become an active and productive participant in the economy.