Britain’s worklessness crisis has reached record levels, with official figures showing that 298,000 households now contain working-age adults where nobody has ever held a job.
The Office for National Statistics (ONS) said the figure is the highest recorded since data collection began in 1996.
The total represents an increase of almost 40,000 households compared with the first quarter of last year.
When student households are included, the figure rises to almost 350,000, marking the highest level since 2011 following the financial crisis and peak unemployment period.
The data has intensified concerns over growing numbers of working-age Britons with no experience of employment, raising fresh questions about the country’s long-term economic outlook.
Alan Milburn, Labour’s worklessness tsar, warned last week that Britain risks creating a “lost generation” amid what he described as an employment crisis potentially unmatched in 200 years.
The former Labour minister said the benefits system was failing to help younger people move from education into work.
“Young people have just got a different problem, and increasingly it’s a new problem, which is disengagement and detachment,” Mr Milburn said.
Britain faces “lost generation” as record number of households have never worked
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“It’s not that somehow they’ve been in the labour market, they’ve never been in the labour market.”
His comments reflect mounting concern that large numbers of younger Britons are becoming detached from employment before beginning their working lives.
The figures also point to a shift away from traditional unemployment, where workers lose jobs, towards a situation where many people have never entered the workforce at all.
Since the 2024 general election, the number of households where every working-age adult is unemployed and actively seeking work has risen by 55 per cent.
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Britain now has 327,000 households where all residents aged between 16 and 64 are unemployed, compared with 209,000 previously
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More than 2.6 million households also contain working-age adults who are economically inactive, meaning they are neither employed nor looking for work.
A further 227,000 households contain a mixture of unemployed and economically inactive residents.
In total, 3.2 million workless households include 4.3 million working-age people, meaning more than one in 10 adults lives in a home without employment.
Regional differences remain significant, with the North East recording the highest proportion of workless households at 14.6 per cent.
The South East recorded the lowest proportion at 7.4 per cent.
Demand for workers also appears to be weakening as economic growth slows and businesses face mounting financial pressures linked to the Iran conflict and rising energy costs.
The services sector contracted in May for the first time in more than a year, according to S&P Global’s purchasing managers’ index.
Businesses are also facing pressure from rising wages and higher energy bills, leading some employers to reduce staffing levels.
Matt Swannell, chief economic advisor at the Item Club, warned the economy could continue to weaken during the second half of the year.
“The economy will continue to lose momentum and flirt with recession in the second half of the year,” Mr Swannell said.
“Rising energy bills and a deteriorating jobs market will squeeze households’ spending power further.”
Labour said it was introducing major employment reforms aimed at improving opportunities across the country.
A Labour spokesman said ministers were “bringing forward the biggest employment reforms in a generation to create opportunity for people across the country, including those overlooked for too long”.