Government review proposes welfare changes for under-25s

A new government-commissioned report led by former health secretary Alan Milburn is set to propose a radical overhaul of the UK welfare system, which may result in some young people receiving less financial support. The review, which focuses on the "some" individuals within the 18 to 24 age bracket currently outside of education, employment or training, aims to shift the focus from short-term benefit reliance to long-term life prospects.

The proposed welfare overhaul would move under-25s off main sickness benefits to encourage employment.

Rethinking some basic concepts of welfare

Milburn’s year-long study, scheduled for publication on Tuesday, suggests that individuals under the age of 25 should no longer be eligible for the health-related components of Universal Credit or the Personal Independence Payment (PIP). Instead, these claimants would receive a basic allowance, potentially supplemented by a new "additional cost allowance" for specific day-to-day needs related to their conditions. While those with the most severe disabilities would qualify for a higher-rate benefit, many other young claimants could see their overall financial support reduced under the new framework.

Milburn acknowledged that the transition would not be "pain-free" and would impact both existing and new claimants. He argued that the current system often traps young people in poverty, prioritizing immediate financial support over their long-term career potential. To balance these changes, the report recommends investing billions into enhanced employment support, including one-to-one advisers, job subsidies, and work placements. The proposed system would also introduce a "carrot and stick" approach, where benefits could be reduced if claimants fail to engage with these mandatory work support options.

Data from the Office for National Statistics indicates that nearly one million young people in the UK are currently considered NEETs, representing one in eight individuals in that age group. The government is expected to translate these recommendations into legislation in the coming year. While the Prime Minister has emphasized the need to invest in youth success rather than paying for failure, the proposals may face opposition from some Labour MPs who have historically resisted significant welfare reforms.

Why it matters

The proposed changes represent a fundamental shift in how the British state supports young people, moving away from unconditional benefits toward a system tied to employment engagement. This overhaul affects hundreds of thousands of young claimants and could take nearly a decade to generate monetary savings for the government.