The number of people who have never worked grew by 52% in the past 20 years, according to the Resolution Foundation.
The think tank also found that the number of working teenagers has almost halved over the same period, with many choosing to prioritise study over part-time work.
It found that a quarter of 16 and 17-year-olds were in work between 2017 and 2019, down from 48% in 1997 to 1999.
Just over 8% of working age people (between 16 and 64), or 3.4 million in total, had never had a paid job. In 1998, the proportion of the working age population that had never worked was 5.4%. The rise in people who had never had a paid job was across a broad base, it added.
Laura Gardiner, research director at the Resolution Foundation, called this a paradox of more ‘working nows’ alongside more ‘worked nevers’, referring to the fact that UK unemployment reached its lowest level since 1975 in October 2019.
She said: “One commonly asserted explanation – that a generous welfare system has increasingly allowed families to choose a life of worklessness – is very wide of the mark. Household worklessness is at record lows and the generosity of out-of-work benefits has declined over recent decades.
“Instead, the growth in the proportion of people who have never worked reflects changes in the lifecycle journey from education to employment, in particular a reduction in ‘earning while learning’ and slower transitions from education to employment.”
She added that “the death of the teenage Saturday job” was just one factor in the sharp drop in the employment rate of students in further and higher education.
The think tank found that in the late 1990s, 56% of young education leavers who had never previously worked got a paid job within the first year after leaving. Today that figure has fallen to 44%.
Gardiner said: “With young people today expected to end their working lives at a later age than previous generations, it’s understandable that they want to start their working lives at a later age too.
“But this lack of work experience can create longer-term problems, particularly if they hit other life milestones like motherhood or ill-health before their careers have got off the ground.”
Additionally, motherhood and ill-health in early adulthood effectively ‘lock in’ a lack of paid work experience for those who have not had any up to that point, the Resolution Foundation revealed.
The proportion of 25-39 year old mothers who have never worked increased from 3.3% in the late 1990s to 6.5% today, while the proportion of 25-39 year old men with health problems who have never worked increased from 4.8 to 7.6%.