Work vs welfare: The battle tearing Britain’s youth apart

Work vs welfare: The battle tearing Britain’s youth apart

Since the Second World War, the British social contract has promised that if you knuckled down, worked hard and paid your taxes, you would be rewarded with a certain kind of life: a home to own, a decent school for your children, healthcare free at the point of use and a pension.

In recent decades, however, the deal has started to fray. Property prices as a multiple of average incomes have risen steadily, while there has been almost no real-terms wage growth since the financial crisis. The returns on hard work have dwindled, and the number of people who depend on the state has swollen.

This week, the contract looks worthless. In her doom-laden press conference on Tuesday morning, Chancellor Rachel Reeves confirmed what had been clear to many, and prepared the nation for tax rises. These will shatter Labour’s manifesto promise not to increase tax on working people. 

They come after 16 months in power in which she and Keir Starmer have failed miserably in their efforts to reform Britain’s bloated welfare system. Unable to make even the mildest tweak to benefits, they have fallen back on taxes. The handouts will continue, and workers must shoulder ever more of the burden.

Widening generational divide

Between unemployment, disability and other forms of benefits, as well as pensions, British households are increasingly reliant on the state. Last year, 53.3 per cent of people were living in households that get more from the public purse than they pay in tax. The nation is heading towards a tipping point, where those who depend on handouts do not vote for them to be reduced, and outnumber the net contributors who are bled dry. 

Welfare looks less like a security net, or something to fall back on in hard times, and more like a way of life. A minority of better-paid workers, meanwhile, are treated as an endless piggy bank to be raided.

The situation is a petri dish for resentment. A survey this week by King’s College London and Ipsos found that 84 per cent of the public say the country feels divided, up from 74 per cent in 2020.

No generation is experiencing this growing sense of division more acutely than the young. They grew up in the shadow of the financial crisis, before the pandemic forced them out of school and university, and on to Zoom. Now, those who have graduated find themselves in the teeth of a tightening jobs market. 

Wages are stuck, property prices are out of reach for almost anyone without family help, and graduates are saddled with astronomical student debt while watching ever more of their peers receive government handouts. Small wonder the Ipsos survey found that the number of 16- to 24-year-olds who would like the UK “to be the way it used to be” has doubled in five years to 31 per cent.

It is not only low-paid workers feeling the pinch. Graduates who hoped their degrees would give them a premium in the labour market are finding that is no longer the case. Earlier this week, City bosses warned that upward pressure on the minimum wage meant it was rapidly catching up with graduate pay in traditional white collar jobs in accountancy, law and finance. They are wary, too, of making graduates work long hours – a rite of passage for such careers – for fear of running afoul of minimum wage laws.

Hardening social attitudes

Feeling let down and ignored by traditional parties, the young are fragmenting politically, just like their parents and grandparents. They are breaking to Left and Right, splitting on gender lines and, perhaps most surprisingly, hardening on social issues too.

A report this week by the National Centre for Social Research (NatCen) reveals the depth of the dissatisfaction. For the first time, a majority of the 2,100 respondents said they believe the welfare system is so generous it is stopping people from supporting themselves. 

Twenty-three per cent, the highest figure since records began in 1987, agreed strongly that “people would learn to stand on their own two feet if welfare benefits were less generous.”

And the most dramatic change in opinion came from the 16- to 34-year-old demographic. The percentage of that group agreeing with the statement shot up from 13 per cent in 2024 to 28 per cent in 2025. Attitudes towards criminals are hardening, too. More than two-thirds of those aged 25 to 34 said offenders should be given tougher sentences.

Abi France, a 25-year-old from Oxfordshire, did everything expected of her. Hoping for a career in mental health care, she did a first degree in psychology, then a Masters in neuroscience. She amassed thousands of pounds of debt to do so, only to find that jobs were thin on the ground. It was demoralising, especially when so many of her generation are relying on welfare instead.

“Going into a saturated job market, then going into a minimum wage job, and having to fight really hard for that, and then going into another minimum wage job, was quite disheartening,” she says. “I was aware I could have been getting the same amount on benefits. For me personally, that wasn’t a reason not to work, but it was disheartening, and it definitely made me question the UK.”

For obvious reasons, a life on handouts has never appealed to aspirational young professionals, but in some cases, the outcomes are becoming oddly similar.

“You find that you’re working 38-, 40-, 50-hour weeks, sometimes more,” says one 26-year-old consultant from north London. “Yes, you’re being paid to an extent for it. But equally, you hear stories, and you see cases of the benefit system being used to fund more than the bare minimum lifestyle, and in some cases, abused. People lie and don’t get caught out, or even if they do get caught out, the enforcement measures aren’t there to clamp down on that abuse.”

Hard work no longer pays

At heart, it’s about fairness or, rather, the lack of it. For many young Britons, doing the right thing can look like working hard and getting a good degree, coming out, doing hundreds of interviews to get a job, then finding that you’re sharing a flat with people earning as much as you on minimum wage or benefits. And that this situation, rather than being a temporary pit stop on the way to riches, endures well into your 30s.

Indeed, a combination of a tightening graduate labour market, student debt and high property prices mean knuckling down and working hard is no longer a guarantee you will get on the ladder, or even be able to rent alone. In 2024, the average age of a first-time buyer in England was 34 – in the mid-1980s, it was 27. At the same time, more than one million young people are on benefits, not being in jobs or training. Soaring numbers are signed off work for mental health issues, which increasingly includes milder conditions like anxiety.

“I don’t think that you incentivise well by taxing working,” France says, adding she often feels, “very frustrated and angry” with the current system.

“The more you increase tax, the more you disincentivise working and incentivise not working by offering benefits. I’m not saying that that’s the intended effect, but that is an outcome – that is how psychology works. If you’re offered something to not work, and you’re getting stuff taken away for working, you know, that factors in.”

‘The more you increase tax, the more you disincentivise working,’ says Abi France, 25 - Rii Schroer

‘The more you increase tax, the more you disincentivise working,’ says Abi France, 25 - Rii Schroer

Georgiana Davies, 30, agrees. Despite having two jobs, one in TV and one in social media, she has been renting since she started her modern languages degree at University College London (UCL) 12 years ago.

“Even with those two jobs, trying to find a flat in London, in an area that I want to live in, in a house that is not poorly built, that I can afford, is extraordinarily difficult,” she says. “I don’t think it’s possible to buy a flat unless you have significant parental help.”

“A benefits system is needed for people who are genuinely in need,” Davies adds. “If you’ve got mild anxiety, I think not going to work probably makes that worse. And it leads to people being less sympathetic to genuine mental health problems. I think that ‘pull yourself up by the bootstraps’ attitude needs to come back.”

The two women are characteristic of a generation that is seeing the rewards of hard work dwindle while ever greater numbers of their peers rely on state support. British welfare spending has increased steadily in recent decades, driven by pensions and exacerbated by a sharp recent rise in health and disability claims. 

Social protection accounted for £384bn in 2024-2025, nearly a third of all public spending. Disability benefits have increased from £36bn before the pandemic to £48bn in 2023-24, and are predicted to reach £58bn by 2029. At the same time, the tax burden has risen, from a modern low of 27 per cent of GDP in 1993 to 31 per cent in 2009 and 35 per cent in 2023.

Escalating brain drain

Disillusioned and losing faith in the future, many are tempted to emigrate. Those who remain are abandoning traditional political parties to throw their weight behind more extreme and populist political parties: the Greens on the Left, and Reform on the Right.

Sir John Curtice, the polling guru and senior research fellow at NatCen, says the findings echo his precious research, and that we risk young people losing faith in a political system which feels unfairly weighted against them.

“Young people tend to be a bit more on the Left and are socially liberal, but they are not particularly interested in increasing taxes to spend more on public services,” he says. “The proportion of public expenditure that is spent on services for older people, like health and social care, has been going up. Meanwhile, we have increasingly pulled out of providing public funding for younger people that go off to higher education. There’s no doubt there’s a note of economic concern amongst younger people.”

He adds that it is not just the young people one might typically think of as “left behind” who are feeling the pinch. Student loan fees, in particular, are adding to the frustration of professionals who would historically have expected to have had a smooth route to home ownership.

“Why do you think we are having all these labour market disputes amongst public sector professionals, particularly junior public sector professionals, for example, doctors?,” he says. 

“As a combination of decisions made by Labour and Tory governments, anybody who has been to university is paying 9p in the pound income tax more than everybody else. They’re doing that at a time when housing prices are sky-high, particularly in places like London, and living standards are struggling to improve in terms of GDP per head. Lo and behold, amongst those people in particular, you’ve got a problem.”

Young British medical professionals, for example, are leaving in their droves after years of training in the UK – nearly 2,000 in 2022-2023 – and heading to Australia, drawn by better pay, working conditions and quality of life.

Conor Nakkan, an economic researcher for the Intergenerational Foundation, a think-tank advocating for fairness between generations, believes that a loss of faith in the future among young people could have unpredictable and worrying consequences. Two factors in particular are driving the broken social contract, he says. 

“There is a general frustration amongst young people that centrist, status quo, political parties really aren’t taking their concerns and experiences into account, both in what policies they are putting forward and how they are communicating them.”

Nakkan, who is originally from Australia, says it is significant that despite many other parallels with the UK, his home country is not experiencing the same levels of dissatisfaction among the under-35s.

“Populist politics is not really happening amongst the young in Australia,” he says. “There’s compulsory voting there, the Labor party which just won has promised to cut student debt, and there’s investment in housing. It shows there’s something going wrong in the UK.”

“There is a sense that young people were encouraged to go to university, increase their skills, do all the things that were expected of them, only to come out of university and find the graduate job market is really tough,” he adds. 

“Especially this year, with the looming threat of AI and what effect that will have on the workplace. A lot of this comes back to the lack of opportunities for housing. That really prevents people from starting to form an independent post-university adult life of setting down roots. 

“When you’re paying sky-high rents to live in a dodgy apartment somewhere on the outskirts of London, you’re working your arse off, you’re paying 9 per cent extra to pay off your student loans, I can see why that drives a huge amount of resentment and disillusionment.”

He says a stagnating economy turns considerations about welfare into a “zero-sum” game. “When there’s a sense the pie isn’t getting bigger, it becomes about pitting the distribution of resources against different groups – who’s more and less deserving. There’s a sense that the economic future is more bleak. You have a limited amount of resources. If people are deemed to be the undeserving poor, I can see why they would attract more ire when your situation is not as good as you hoped it would be.

“You get this lack of hope in the future. A lot of sociological research shows that once people lose hope that living standards will continue to rise and their children will be better off than they are, that can drive people to some pretty radical positions that sound great, but in practice are going to be hard to do.”

Fed up voters

The evidence is that young people are turning away from Labour and the Conservatives. According to a survey by polling company Find Out Now, published in the FT this week, support for the Green Party among 18- to 29-year-olds has surged to 31 per cent since the election of their new leader, Zack Polanski, in September. Polanski ran an insurgent campaign advocating for the Greens to expand from their traditional environmental focus to encompass more populist Leftist policies, such as a wealth tax. Labour, which was polling as high as 39 per cent in January, has slumped to 19 per cent.

Perhaps more surprisingly, Reform’s national popularity is echoed among young people, albeit at lower levels.

Sensing a growing rift between net contributors and beneficiaries of the state, Nigel Farage this week said Reform voters were part of “alarm-clock Britain”, people who were “up early and working hard”.

His party has overtaken Labour to be the second most popular party among under-40s at 22 per cent, although they remain some way behind their polling level among older people, and even further behind Polanski’s billionaire-averse Greens among younger voters.

“The young have always been more Left-wing than older people,” says Ben Page, a visiting professor at King’s College London and former chief executive of Ipsos, a polling company. “Generally, people become Right-wing or small-c Conservative when they own a house. Because that is happening later in life, or not at all, then you should be prepared for people to be more willing to countenance supporting the Greens.

“The historical deal in Britain was that you put up with immigration and the rich because the state would look after you, and now it won’t. Fifteen-plus years of no increase in real wages and rising asset prices in the shape of housing does tend to make people fed up. 

“There’s now a large number of people, at least half the population, who expect to be poorer than their parents. That’s a massive shift in the last 20 years. Meanwhile, the state is trying to pay huge debts and cope with massive demand for healthcare with an ageing population.”

There is increasing bifurcation within the younger cohort, too. In March, a report by Focaldata based on a survey of more than 2,000 16- to 29-year-olds found that 20 per cent of young women said they were Left-wing, compared to 13 per cent of young men. According to YouGov, at the general election last year, 6 per cent of women aged 18 to 24 voted for Reform, compared to 12 per cent of men.

Salem Zayed, a 23-year-old student, says he is leaning towards voting for Reform at the next election - Clara Molden

Salem Zayed, a 23-year-old student, says he is leaning towards voting for Reform at the next election - Clara Molden

Salem Zayed, a 23-year-old student, exemplifies the trend. “At the next election, I would lean towards Reform,” he says, adding that it is not solely about economics. If Gen Z have grown up in usually straitened economic times, they are also the first to have grown up in the information-drenched smartphone era.”

“Rather than immediate material conditions, it’s more to do with me seeing different ideas on social media,” he adds. “A lot of the discussion around immigration has been held together by a kind of societal taboo. If you oppose immigration, you’ll land yourself in all kinds of hot water. But online, you get to hear that maybe immigration is not this overwhelmingly positive thing.”

Zayed, whose parents moved to the UK from Egypt, says he believes some more recent immigrants “feel they are owed something, because they have historically been wronged”, he says. “They carry that attitude of resentment. In history, that has never been the attitude of the country you are migrating to. 

“When my parents came to this country, it was to get something better for their children, even though the British empire had a history in Egypt. We have gratitude. The fact that’s been lost means our immigration model obviously does not work.”

Not everyone agrees with his diagnosis. “I think a lot of these things are the consequence of governments that can’t get a grip or figure out how to tax the richest in society, and instead pass the responsibility of raising capital to middle-class or working-class people,” says one Green-leaning woman, who lives in Bristol.

“Benefits are there to support vulnerable people in our society, and I think it’s an important part of what we can offer as a country. The welfare state is an important part of our national identity. Undoubtedly there are some people who take the p---, but I think this percentage has been grossly inflated by Right-wing media and politicians.” 

The statistics suggest far more of her cohort are sympathetic to her perspective.

Broken social contract

Ben Page says his research shows that some of the hardening on social attitudes may be due to long-term forces, as well as dissatisfaction with economic prospects. “Support for the statement, ‘One of the best things about Britain is the welfare state’ has been going down since 1980. We thought it was to do with benefit scroungers, and unemployment receding. But it wasn’t actually. It’s just that each generation is less enthusiastic. If you could remember the 1930s, the post-war welfare state was amazing. If you’ve grown up in relative prosperity, it’s a different story.”

Housing affordability is critical. The median price-to-earnings ratio has doubled from 3.5 in 1997 to 8.3 in 2023. When Labour won the general election last year, it promised to build 1.5 million new houses. So far, it has failed miserably. One quick fix, says Conor Nakkan, would be to reform student loan repayments.

“For a long time, there was a solid graduate premium, which helped to deal with the debt, but it is increasingly evaporating,” he says. The pay gap between graduates and non-graduates for 21- to 30-year-olds has fallen from 35 per cent in 2007 to 21 per cent in 2024, while student fees have increased.

“The rate of loan repayment really affects young people’s disposable incomes to live the life they want, whether it’s [to] save for a house or go on holiday,” Nakkan adds. “Labour’s increase to employers’ National Insurance contributions has not helped, either.

“The first people not to be hired, or to be sacked, are going to be young people. We’ve already seen some of the impacts that has had on graduate hiring. Not punishing employers so much would be a good way of improving the jobs market for younger people.”

Abi France found a rewarding and stable job in the end. But she worries the national picture remains complicated. “It feels like we’re in a big problem that feels very hard to get out of,” she says. “There’s so many highly qualified young people that can’t get jobs, and less highly qualified people that can’t get jobs that are still worthy of having them. There’s a lot of people willing to give but just not the opportunities there.”

It has been typical for people to grow out of the rebellious politics of their youth and embrace more centrist or conservative views as they pass through the expensive milestones of adulthood towards middle age: owning a home, paying more tax and having children. If they never have the opportunity to grow up, there is no good reason for their politics to change, either.

When the social contract looks to be in tatters, who can blame young people for seeking alternative politics, or voting with their feet?