The move comes as youth unemployment reaches 16.1% and the amount of young people not in education, employment or training (NEET) edges close to the one million mark.

The scheme will go live this June and grants will be paid directly to business owners from nominated third parties, the Department for Work and Pensions (DWP) confirmed.

Pat McFadden, minister for work and pensions launched the ‘new deal’ for young people, called the Youth Jobs Grant, where businesses will receive £3,000 for every young person they hire aged 18-24 who has been on benefits and looking for work for six months, starting in June 2026.

The £3,000 grant will be paid through delivery partners, including specialist employment support organisations, charities, non-profits, social enterprises, local authorities and mayoral strategic authorities.