ONS Labour Market Data: Jan 2026: 90,000 Fewer Under-24s on payrolls since July 2024

The Latest ONS Labour Market Figures came out today (Tuesday 20th January 2026). The data shows that vacancies are stable at 734,000, but… there are 85,000 fewer vacancies than before the pandemic. Unemployment is at 5.1%. London has the highest level of any UK region at 7.2%. Youth unemployment continues to rise and is up on the quarter and on the year. There are 561,000 unemployed people aged 18-24 (13.7%).

The ONS (Office for National Statistics) Labour market data estimates the employment, unemployment, economic inactivity and other employment-related statistics for the UK. The January release of data is for the September to November 2025 period.

• Today’s statistics from the ONS showed that unemployment rose by 8,000 to 5.1 per cent in the three months to November 2025 – up by 333,000 since Jul–Sep 2024 where it was 4.4 per cent. The number of people in payrolled employment fell by 223,005 between July 2024 and December 2025. Employees under 24 fell by 89,678 over the same period.  
• The UC Health caseload increased by 2,600 per day between January and September 2025, the latest month with data available from the DWP.  
• According to the ONS, 9.4 per cent of children were living in workless households in 2024, up 1.2 percentage points on the year before – the sharpest rise on record.  
  

Number of Payrolled Employees:

Estimates from ONS for payrolled employees based on administrative data from HM Revenue and Customs (HMRC) in the UK fell by 155,000 (0.5%) between November 2024 and November 2025, and decreased by 33,000 (0.1%) between October 2025 and November 2025.

When looking at September to November 2025, the period comparable with our Labour Force Survey (LFS) estimates, the number of payrolled employees fell by 135,000 (0.4%) over the year and by 43,000 (0.1%) over the quarter.

The early estimate of payrolled employees for December 2025 decreased by 184,000 (0.6%) on the year, and by 43,000 (0.1%) on the month, to 30.2 million. The December 2025 estimate should be treated as a provisional estimate and is likely to be revised when more data are received next month.

UK Employment Rate for 16-64 years was estimated at 75.1% against a Government target of 80%

The UK employment rate for people aged 16 to 64 years was estimated at 75.1% in September to November 2025. This is largely unchanged in the latest quarter but above estimates of a year ago.  

The UK unemployment rate for people aged 16 years and over was estimated at 5.1% in September to November 2025. This is up in the latest quarter and above estimates of a year ago.

Economic Inactivity Rate for 16-64 year olds is estimated at 20.8% for September – November 2025

The UK economic inactivity rate for people aged 16 to 64 years was estimated at 20.8% in September to November 2025. This is down in the latest quarter and below estimates of a year ago.

The UK Claimant Count is 1.677 Million, December 2025 increased on the month, but decreased on the year:

The UK Claimant Count for December 2025 increased on the month, but decreased on the year to an estimated 1.677 million. The Claimant Count figure for the latest month is provisional and is subject to revisions after first publication. This is owing to later amendments to records in the administrative systems, for example as work capability assessments conclude and more information is available about benefit claimants’ ability to work. Revisions in recent months have tended to be made downwards, as shown in the ONS LFS quality update article.

October to December 2025 Vacancy Numbers Had a Small Increase by 10,000

Early estimates for vacancies in the UK for October to December 2025 suggest a small increase of 10,000 (1.3%) to 734,000 compared with July to September 2025.

Annual growth in employees’ average earnings in Great Britain for regular earnings (excluding bonuses) was 4.5%, and for total earnings (including bonuses), was 4.7% in September to November 2025. Annual average regular earnings growth was 7.9% for the public sector and 3.6% for the private sector. The public sector annual growth rate is affected by some public sector pay rises being paid earlier in 2025 than in 2024. This has caused a base effect that has now reached its peak and will phase out over the next three months.

Welsh Government response to latest Labour Market Statistics – January 2026

“Evidence from a range of sources suggest the labour market in Wales has followed similar trends to the UK since the pandemic. Latest figures from the Annual Population Survey (APS) show the unemployment rate for people aged 16 and over in Wales was 4.5%, compared to the UK rate of 4.2%.

“We have supported about 46,000 jobs this Senedd term through business support – as we build a stronger, fairer, and greener economy. We also offer a range of programmes to help people into jobs. Since 2022 Communities for Work+ has supported around 19,900 people into work, Jobs Growth Wales+ 18,000 and ReAct+ 6,200.

“We are quoting the Annual Population Survey because of concerns about the reliability of Labour Force Survey data. In fact, the Office for National Statistics (ONS) itself advises caution when taking these statistics as the only measure of the labour market in Wales. For greater accuracy it is recommended that a range of sources are used, while the ONS develops a new survey.”

Sector Reaction:

Responding to the latest ONS figures, Stephen Evans, chief executive at Learning and Work Institute (L&W), said:

“The labour market remains flat with the number of payroll employees estimated to have fallen again. Underneath this headline picture are further worrying falls in payroll employment in retail and hospitality, down 142,000 in a year. This contrasts with rises of 52,000 in health and social care and public administration. Looking ahead, slow growth and global instability increase the risks of rising worklessness, increasing the importance of the Government focusing on growth.”

Ben Harrison, Director of the Work Foundation at Lancaster University, said:

“Today’s data shows 3.86 million workless adults want a job, but weak vacancy levels and fragile employer confidence mean jobseekers are facing an increasingly competitive labour market. Worryingly for Ministers, there are signs unemployment may not yet have peaked.

“The UK’s ‘tight’ labour market has clearly eased. While recent years were marked by high vacancies and rising wages, we now have around 380,000 more people wanting to work than a year ago. This includes both more active jobseekers and rising numbers of economically inactive people, such as students and those with long-term health conditions, who say they want a job.

“For those actively looking for work, young jobseekers and people in London – where figures indicate the unemployment rate has climbed to 7.2% – are facing the biggest challenges. As a key bellwether for the national economy, this is bad news for jobseekers in the capital and risks being replicated elsewhere without intervention.

“Vacancies across the UK are now more than 85,000 below pre-pandemic levels, while redundancies are increasing in some sectors. With more people chasing fewer jobs, finding work is becoming harder – especially for those out of work for longer periods or at the start of their career.

“Nearly four million workless people wanting a job should be a major opportunity for a Government that came to power 18 months ago pledging to raise the employment to 80%. But delivering on that ambition will require concrete action to boost business confidence, drive investment and create more secure, flexible jobs across the UK in 2026.”

Joe Shalam, Policy Director at the Centre for Social Justice, said:

“Today’s figures reflect a labour market groaning under the weight of soaring bills for employers and a welfare system failing to get people into work.

“Graduate jobs are drying up, thousands are signing onto sickness benefits each day, and the number of children growing up in workless households is rising.

“Without radical action to get Britain working again, it is hard to see how the Government can fulfil its economic growth mission.”

Arushi Bhasin, Senior Economist at Youth Futures Foundation, comments:

“Today’s ONS labour market data reveals that youth economic inactivity remains worryingly high. Around 1 in 5 (19.3%) young people not in full-time education are economically inactive. An estimated 798,000 16-24 year-olds not in full-time education are neither in work, nor actively seeking it. This marks a sharp rise since 2021 as the UK emerged from the pandemic, where 143,000 fewer young people were inactive. Furthermore, economic inactivity among young women not in full-time education remains higher than for men at 21.7% (424,000) compared to 17.2% (374,000) for young men.

“Last month, the Government launched its investigation into Young People and Work – led by Alan Milburn – exploring the drivers of rising numbers of young people who are not in education, employment or training (NEET), with a focus on economic inactivity among disabled young people and those with health conditions. The scope and ambition of the investigation is welcomed, and we look forward to working with Government to ensure its recommendations are based on the most robust evidence and informed by the lived experiences and views of young people.

“As our Youth Employment 2025 Outlook reveals, the prize of sustainably addressing the UK’s stubborn youth employment challenge for our young people and the economy is enormous. If the UK matched the Netherlands’ youth participation rate, approximately 567,000 more young people would be in work or education, boosting the economy by £86 billion.”

Jack Kennedy, Senior Economist at Indeed said:

“Further signs of softening in the labour market, alongside easing wage growth, strengthen the case for additional interest rate cuts from the Bank of England in the coming months, as inflation pressures continue to fade.

“Unemployment continues to edge higher, with youth unemployment a particular concern. Entry-level hiring remains subdued, making it harder for younger workers to get a foot in the door. That appears to be more due to cyclical weakness in hiring demand rather than any widespread impact from AI on junior roles. 

“Employers remain cautious with confidence still fragile, although uncertainty has eased somewhat post-Budget and now that the Employment Rights Act is settled.

“One bright spot in the figures is that vacancies have stabilised in recent months, but a clearer improvement in the UK economic outlook is likely needed before hiring activity picks up more meaningfully. Lower interest rates would be the most obvious catalyst, potentially supporting consumer spending. Until businesses sense a more durable improvement in the outlook, the labour market looks set to remain subdued.”

Chancellor of the Exchequer, Rachel Reeves, said:  

“My number one focus is to cut the cost of living. At the budget I announced £150 off energy bills, a freeze to rail fares for the first time in 30 years, a freeze to prescription charges for the second year running, and an increase to the national minimum and living wage. Money off bills and into the pockets of working people is my choice. There’s more to do, but this is the year that Britain turns a corner.”

Chief Secretary to the Treasury, James Murray, said:

“Last year we doubled our headroom and we are forecast to cut borrowing more than any other G7 country with borrowing set to be the lowest this year since before the pandemic. It cannot be right that £1 in every £10 we spend goes on debt interest – which could be better spent on our nurses, police officers and teachers, that’s why we’re tackling it.

“We are stabilising the economy, reducing borrowing, rooting out waste in the public sector and making sure that public services deliver value for taxpayers’ money.”