PolicyLens

Methodology note

Create a GBP 5,000 First Job Bonus: calculation note

Scenario assumptions behind the Create a GBP 5,000 First Job Bonus estimate. The figures are illustrative and exclude unrelated Conservative pledges.

View main policy page: Create a GBP 5,000 First Job Bonus

Central fiscal result

+GBP 1.5bn - Net fiscal impact in 2028-29

Low case: +GBP 0.5bn. High case: +GBP 4.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

  • Model GBP 5,000 payment for qualifying first-job entrants.
  • Central case assumes 300,000 recipients in 2028-29.
  • Baseline has no equivalent universal first-job payment.
  • Excludes employer-side apprenticeship subsidies.

Affected population

  • Affected population is young first-job entrants, not all employees.
  • Central recipient count is 300,000; high case 800,000.
  • Indirect exposure includes employers hiring young workers.
  • Eligibility for students and part-time jobs is unspecified.

Gross impact

  • Central cost: 300,000 recipients x GBP 5,000 = GBP 1.5bn.
  • No tax offset is scored if payment is tax-free.
  • Low case assumes tight targeting; high case broad eligibility.
  • Employment additionality is described, not booked as saving.

Fiscal build-up, central case

  • First Job Bonus payments: +GBP 1.5bn
  • Administration and fraud control: +GBP 0.1bn
  • Tax receipts from extra work: -GBP 0.1bn
  • Benefit savings from extra work: GBP 0.0bn

Central net impact: +GBP 1.5bn in 2028-29.

Behaviour and pass-through

  • Low case assumes tight targeting and low take-up.
  • Central case assumes 300,000 claims and limited additionality.
  • High case assumes broad eligibility and high take-up.
  • Sustained-employment conditions reduce fraud but delay support.
  • No macro productivity gain is assumed.

Phasing

  • 2026-27: +GBP 0.3bn. Preparation or partial implementation.
  • 2027-28: +GBP 1.2bn. Main ramp-up year.
  • 2028-29: +GBP 1.5bn. Target-year central estimate.
  • 2029-30: +GBP 1.5bn. Continuation at steady-state assumptions.

Main source groups

  • con-plan-2026: Conservative live policy page; used to identify current pledge wording.
  • con-student-2026: Conservative student-loan announcement; used for Plan 2 and apprenticeship scenarios.
  • obr-efo-mar-2026: OBR March 2026 forecast; fiscal and macro baseline.
  • dfe-apprenticeships-2026: DfE apprenticeship statistics; starts and participation baseline.
  • card-kluve-weber-2018: Active labour market programmes; informs behavioural and incidence assumptions.
  • chetty-2008-ui: Welfare and job search; informs behavioural and incidence assumptions.