“A growing number of young people entering the workforce much later risks widening that savings gap in the future.
“While retirement will seem far away for most people in their early twenties, even a few years out of the workforce early on can mean thousands less in retirement.
“Standard Life analysis shows that an employee in their mid-20s earning £25,000 could lose out on over £5,000 in today’s terms at retirement age if starting work – and workplace pension contributions – just one year later.
“A delay of five years could mean losing out on as much as £24,715.
“Helping young people into good-quality work today is vital to protecting their financial security for decades to come.”
Henry Parkes, principal economist at IPPR:
“These figures confirm that too many young people are still struggling to get a first foothold in work.
“The answer isn’t simply to tell young people to try harder.
“Where you live can make a huge difference to your chances, and in too many parts of the country there simply aren’t enough suitable first jobs to go around.
“The Milburn Review should match support with opportunity: creating thousands of paid first jobs where they are needed most, opening up more apprenticeships and giving young people proper, personalised support.
“Every young person should have a clear route into work and adulthood, wherever they grow up.”
Angeline Ong, senior technical analyst at IG:
“Burnham needs to make getting young people into work an urgent priority, because the economic case for doing so is overwhelming.
“Helping people start their careers earlier means more productive years in the workforce, a stronger tax base and a much better chance for younger generations to build lasting financial security.
“Work experience and networking schemes can only go so far when the jobs themselves are not there, or when the cost of hiring makes businesses think twice about taking on younger workers.
“Nearly two in five UK businesses say rising employment costs and labour or skills shortages are among their biggest challenges over the next six months, according to BDO.
“Any serious plan for youth employment has to address the pressures facing the employers expected to create those jobs.
“The financial penalty for being locked out of work at the start of your career can follow you for decades.
“The Milburn Review estimates that spending time as a NEET can cost a young person up to £300,000 in lifetime earnings, while our analysis suggests missing the first eight years of pension contributions could leave someone approaching retirement with almost £310,000 less than a person who started saving at 22.
“Those early years matter enormously because once they are lost, you cannot get back the decades of potential investment growth that would have followed.
“Every young person should be able to see a credible route from education into paid work. Getting this right would strengthen the economy today while giving a generation a better chance of building wealth, saving for retirement and becoming financially independent.
“Failing to act risks creating a much bigger bill in the future, both for those young people and for the state.”
Richard Hamer MBE, HR director of education and skills at BAE Systems:
“The latest ONS data is a stark reminder that too many young people are left without the opportunities and support needed to move forward in life.
“These numbers also underscore the importance of partnerships across industry, government and education to strengthen pathways into work.
“Apprenticeships are one of the most powerful tools we have to do that.
“I’ve seen firsthand the difference these opportunities can make – providing the option to earn while you learn, gain qualifications and develop practical skills. Perhaps more importantly, they build confidence and resilience which cannot always be taught or found elsewhere.
“We have over 6,800 people in early careers programmes across the UK and are committed to helping even more young people find their footing, including through work placements and outreach to schools.
“At a time of economic uncertainty, widening access to high-quality opportunities is not just the right thing to do for the next generation – it is vital for the long-term success of industry.”
