PolicyLens

Conservative - Youth jobs

Create a GBP 5,000 First Job Bonus

Pay or credit up to GBP 5,000 for young people entering a first job, with eligibility still unspecified.

Last updated: May 2026.

Read the policy-specific methodology note

Eligibility gap

The policy promises a GBP 5,000 First Job Bonus but does not specify age limits, earnings tests, tax treatment or whether the payment goes to workers or employers.

  • Gross cost depends on take-up.
  • Deadweight is likely high.
  • Work incentives depend on design.

Core trade-offs

Eligible young workers gain cash support, and some may enter work faster. But many recipients would have taken jobs anyway, making the fiscal cost high per additional job created.

  • Young starters gain the direct payment.
  • Taxpayers fund a large transfer.
  • Extra employment may be modest.

Fiscal impact by 2028-29

+GBP 0.5bn to +GBP 4.0bn. Central estimate: +GBP 1.5bn.

  • Positive numbers mean net fiscal cost; negative numbers mean Exchequer savings.
  • Main cost is direct bonus payments.
  • Extra tax and benefit savings are likely modest.
  • Deadweight could be high.
  • This is not an official costing.

Economic impact by 2028-29

  • Jobs: Some entry into work may accelerate; deadweight likely substantial.
  • Wages: Raises net income for eligible young workers, not underlying productivity.
  • Prices: Little direct price effect expected.
  • GDP / productivity: Small positive only if it creates extra employment, not just transfers cash.

Assessment

A first-job payment is simple and visible, but likely pays many young people who would have worked anyway. The economic case improves only if tightly targeted at NEET young people or combined with training and employer matching.

Confidence: Low. Payment size is clear; eligibility, take-up and additional employment are not.

Main risks

  • Deadweight cost: Many recipients would enter work without the bonus.
  • Gaming risk: Employers and workers may relabel short jobs to qualify.
  • Poor targeting: Higher-income young workers may receive transfers with little employment effect.

Safeguards

  • Target NEET or long-term unemployed young people.
  • Require sustained employment before full payment.
  • Publish deadweight and additionality estimates.

Academic evidence

UK government evidence

Office for Budget Responsibility, 2026

OBR fiscal forecast

The OBR forecast sets the macro, borrowing and receipts baseline used for broad fiscal context.

Prevents treating tax cuts or spending changes as self-financing.

Economic and fiscal outlook: March 2026 (2026)

Department for Education, 2026

Apprenticeship statistics

Apprenticeship starts reached 226,620 in August-January 2025-26, with under-19s 23.6% of starts.

Anchors the scale of a 100,000-place expansion.

Apprenticeships, academic year 2025/26 (2026)

Sources

Other Conservative policies

PolicyLens estimates are illustrative and should not be treated as official costings.