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A major new analysis has found that more than 700,000 university graduates in the UK are currently unemployed and receiving state benefits, sparking concerns that the education system is out of balance. The study shows a 46% increase in graduate benefit claimants since 2019, with many forced to rely on welfare due to a shortage of practical and technical skills.
Research by the Centre for Social Justice (CSJ) reveals that 707,000 degree-holders are now claiming benefits—far higher than previously estimated. Using data from the Department for Work and Pensions and the Labour Force Survey, the findings indicate that a growing number of graduates are turning to jobcentres in search of support.
Around 400,000 unemployed graduates are claiming Universal Credit, including approximately 110,000 people under the age of 30. This has reignited debate about whether traditional university degrees are delivering sufficient value for younger workers entering the labour market.
Poor health has become a significant driver of graduate unemployment, with 240,000 claimants reporting that illness prevents them from working. The number of graduates receiving sickness-related benefits has more than doubled since 2019, rising by 105 over the past seven years.
The CSJ argues that the UK’s heavy focus on expanding university education has skewed the labour market, leaving many graduates overqualified and competing for a limited pool of professional roles. At the same time, employers are struggling to recruit workers with technical and vocational skills.
The analysis highlights that for every three young people who go to university, only one pursues vocational training—compared with an equal split in countries such as Germany. According to the report, Rewiring Education, the continued treatment of technical learning as a lesser option has harmed productivity and economic growth.
The report also notes that higher-level apprenticeships (Level 4) can earn up to £5,000 more than the average university graduate five years after completion. Despite this advantage, apprenticeship starts among under-19s have fallen by 40% over the past decade, even though apprentices typically avoid large student debts.
The findings have attracted rare cross-party support, with figures including Lord Gove and Andy Burnham calling for a fundamental overhaul of the education system. They argue that training should be more closely aligned with local labour market needs to reduce long-term dependence on welfare.
Ministers have also been warned that 37% of UK graduates are overqualified for their jobs—the highest proportion among OECD countries. Pressure is mounting on the government to ensure that initiatives such as the Youth Guarantee and the new “Right to Try” scheme place greater emphasis on vocational and technical routes alongside academic education.
