In this month of seasonal transition, the weather is marked with uncertainty here in the UK. It just so happens that this month, the Resolution Foundation has been looking at another transition marked with uncertainty – that of young people and the labour market.

Particularly under the spotlight: Why are more young people falling out of work, education, and training? And what can realistically be done about it?

For founders and investors in WorkerTech, we have a sharper question: where are the points in the transition from education to a first job at which young people lose momentum? And what would it take to build technology that help them move forward again?

Read on to learn more and see you in May!
Aish

Spotlight: The young people lost in transition

The share of 18–24-year-olds not in education, employment or training (referred to as NEETs) has risen from 13% in 2019 to 15% in 2025, leaving almost 900,000 young people navigating a challenging transition between childhood and adulthood in terms of economic status. This rise has made the headlines and the Government agenda, with Alan Milburn’s team set to release findings from a review that is looking into why young people in the UK are disconnected from work.

The latest Resolution Foundation report, ‘Lost in Transition’ argues this recent increase is only part of the story. The UK already had one of the highest NEET rates in the OECD even before the pandemic.

Just over half of the recent rise reflects a weaker labour market. The rest is driven by a sharp increase in economic inactivity, closely tied to worsening health (especially mental health) and rising incapacity benefit claims among young people. Crucially, youth unemployment itself is not unusually high. More young people are simply disengaging from the labour market altogether.

International comparisons helped our researchers challenge some common assumptions about worklessness among young people. Countries with far lower NEET rates do not necessarily have better health outcomes. Instead, they keep more young people in education – particularly vocational pathways – and combine stricter engagement requirements with more generous, hands-on support than in the UK.

Recently, there have also been several headlines about entry-level jobs disappearing. Many have attributed the rise in economic inactivity among young people to this phenomenon. While this is certainly part of the story, this latest report highlights the barriers in the transition between education and work for young people.

Areas to examine are encouraging young people to stay in education and re-engage after setbacks, whilst setting up a better support system to help them navigate ill (mental) health alongside work. The report makes clear there are no quick fixes.

As investors, it also highlights where technology could credibly intervene and points out the junctures where young people fall out of systems entirely. Over the next few months, we’re taking a deep dive into the role of tech in this transition, and if you are a founder, employer or research organisation that focuses on young people entering employment, do get in touch.

Calling all WorkerTech Founders

As we approach one year of activities for the WorkerTech Fund, we wanted to reach out to this community with a reminder of what the Fund was set up to accomplish and what we fund through our investment activities.

At Resolution Ventures, we back early-stage companies using technology to improve work for people in low-paid and insecure jobs. These are products, platforms or tools that directly improve outcomes for workers who tend to be overlooked by venture capital.

We focus on four key areas for improvement. Pay, prospects, power, and wellbeing. In practice, that looks like tools that increase income stability, open up access to skills and better jobs, strengthen worker voice, or improve conditions at work.

We invest at pre-seed and seed stage, and our approach combines capital with the Resolution Foundation’s research, so we can identify where systems are failing workers and support our ventures in tackling those gaps.

We are particularly interested in ideas rooted in lived experience, and in products that can scale to reach large numbers of workers while delivering measurable impact.

If you’re building in this space, or know someone who is, we want to hear from you. You can book a call with us here, no warm intro necessary.

Other insights from the Resolution Foundation

The Employment Rights Act and new reforms in April 

The Employment Rights Act is a major expansion of workers’ rights, but the rights within it will only matter if they are enforced effectively. Compliance with existing labour market rights is patchy: an estimated 445,000 jobs paid below the minimum wage in 2025, 1.4 million workers in 2023-24 reported not receiving a payslip, and 2.2 million jobs in 2025 did not come with any paid annual leave. On April 7th, the new Fair Work Agency (FWA) came into existence, a welcome and important reform that brings together several existing bodies into one organisation, creating a clearer point of contact for workers and employers and improving coordination across the system.

As part of the Labour Market Outlook, RF’s Hannah Slaughter discusses how just the establishment of the FWA alone will not be enough, and that the agency will need sufficient funding, resourcing and powers. Timing is also crucial, as a loosening labour market only raises the stakes. Rising unemployment and falling payrolled jobs, especially in lower-paying sectors, could make workers more vulnerable because they have fewer opportunities to leave exploitative employers.

Labour Market Outlook, Q1 2026

The latest Labour Market Outlook paints a mixed picture. Headline employment remains relatively resilient, but underlying weakness is building. Hiring has slowed, vacancies continue to fall, and pay growth is easing. The report highlights a labour market that is no longer overheating, but not yet in clear decline. However, the effects of the war in Iran are yet to show in the data and numbers.

For workers, the story is uneven. Pay has recently outpaced inflation, offering some relief after a prolonged squeeze. But that recovery is fragile, and risks remain if demand softens further. For younger and lower-paid workers, the outlook is more exposed to shifts in hiring. Fewer vacancies are making it harder to enter or move within the labour market, with younger and less experienced workers feeling most exposed.

The key takeaway is direction of travel. The labour market is cooling, and while this reduces inflationary pressure, it raises questions about job access and progression, especially for those trying to enter or move within the workforce.

Bye Bye Baby

This report examines the long-term decline in UK birth rates and what it means for the economy. The report shows that falling fertility is not a short-term fluctuation but a sustained trend, with fewer children being born across successive cohorts.

The implications are significant. A smaller future workforce will affect economic growth, public finances, and the balance between working-age people and retirees. The report also links these trends to living standards, housing costs, and the financial pressures facing younger adults.

Crucially, the decline reflects choices shaped by economic reality. Delayed parenthood and smaller families are tied to affordability, job security, and life stability

Latest news

TaskHer on The Reflective Impact Entrepreneur Podcast
Founders Paul and Anna joined Umesh Pandya on his podcast to discuss the early days of building their company TaskHer, and how to build for communities that have reason to be skeptical of marketplaces.
Listen on: https://www.youtube.com/@HumanityAssist 

Earlybird launches Interpreter 
Our portfolio company Earlybird has launched Interpreter, a real-time, two-way translation tool built into the Earlybird platform that lets employment advisors and clients communicate in realtime, with support for over 90 languages and dialects.
Read more here: https://www.getearlybird.ai/interpreter 

Apply for direct investment from Resolution Ventures 
We accept applications from WorkerTech ventures on a rolling basis. You can book a slot in our office hours for an initial conversation