A report authored by former Health Secretary, Alan Milburn, has highlighted the number of people aged 16-24 not in education, employment, or training (Neet), sparking concerns about the knock-on impact on saving for retirement.

Recent figures from the Office for National Statistics (ONS) showed the number of 16 to 24 year old Neets had increased to 1.01 million in the first quarter of 2026.

In his interim report, Milburn warned that one in six young people could be Neet in the next five years if action was not taken.

The report’s findings were supported by research from Scottish Widows, which showed 22 to 29 year olds were the least likely age cohort to be saving into a pension each month.

Just over half said they were saving for retirement every month, compared to two-thirds of people aged between 30 and 64.

The 22-29 age cohort was also more likely than any other age group to say income was too low (41 per cent) and that income was too unpredictable (16 per cent) to save for retirement.

“Being out of work can set young people back before they’ve even started saving,” said Scottish Widows head of pension policy, Pete Glancy.

“More than 40 per cent of 22 to 29 year olds are already at risk of pension poverty, more than any other age group.

“If those three million can’t get on the career ladder early, they won’t get onto the savings ladder either, and catching up quickly becomes harder.

“With 12.2 million already facing retirement poverty across the UK, the big risk is that this problem only grows unless young people can find stable work and start saving sooner."

IG market analyst, Aaron Bright, warned that the retirement gap the UK is already facing could be worse than current projections if more young people are not in work and saving for retirement.

"The Milburn review rightly focuses on the employment crisis with the financial consequences of years spent outside the workforce being severe,” Bright said.

“In investing, time is one of your most valuable assets and for young people locked out of work, it's the one thing they can't get back.

“The report itself estimates that today's Neet young people could lose up to £300,000 in lifetime earnings, even if they eventually return to the labour market. The scarring effect is permanent on their savings and investments.

“Every year of inactivity in your 20s doesn't just mean potentially missed contributions to ISAs and pensions, it means forfeiting the compounding returns those contributions would have generated across three to four decades.

“If 1.25 million young people reach their 30s or even beyond without ever having been auto-enrolled into a workplace pension, the retirement income gap we face as a nation will be substantially worse than current projections suggest.”

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