More than 600,000 graduates on benefits
A total of 639,000 people with an honours degree or similar level qualification are claiming Universal Credit, according to the first data of its kind released to Parliament.
That is equal to more than one in nine (11.9 per cent) of Universal Credit claimants and is four percentage points below the proportion with no qualifications.
Those without any qualifications who are receiving Universal Credit numbered 849,000, representing 15.9 per cent of claimants, according to the data from the Labour Force Survey for March to May this year, released to Parliament by the UK Statistics Authority.
The data comes as the full-time employment rate for graduates has fallen from 61 per cent to 59 per cent, with some academics warning that too many degree-holders are leaving university without the skills they need to get a job.
Prof Alan Smithers, the director of the centre for education and employment research at Buckingham University, said there was a significant mismatch between the degrees offered to students in a massively expanded university sector and the demands of the job market.
He said he was 'not a fan' of the term 'Mickey Mouse' degrees, a phrase first coined by Baroness Hodge, the former Labour universities minister, to mean 'one where the content is perhaps not as rigorous as one would expect and where the degree itself may not have huge relevance in the labour market'.
However, he said: 'I don't think we have really established the role of universities in society. We have just expanded them on the grounds that they were a good thing and fairness determined that everyone should have the opportunity to go.
'As a result of that, the system has grown. The kinds of things that are offered lead to degrees but don't qualify people for the kinds of employment that are available. Therefore, people work hard on degree courses for three years and then discover that they don't have much earning potential in the labour market.'
He said there were some graduates, such as those who had chosen to be writers, actors or artists, who were 'quite relaxed' about claiming benefits. But others would have built up massive loan debts on courses that had been elevated to degree level when they did not need to be, such as education or media studies, he added.
Prof Smithers said: 'Many institutions have become elevated to universities and many subjects have become elevated to call themselves degrees, but they then have to shovel things into them.'
The data showed that people who had finished their academic career with top grade GCSEs (A-C, or 4-9) accounted for the highest proportion of Universal Credit claimants at 26.7 per cent. They comprised a total of 1.4 million people.
That was almost five times the rate of those who had 'failed' their GCSEs by receiving grades D-G or equivalent, and who were also half as likely as graduates to be claiming Universal Credit. They numbered 304,000 and accounted for 5.7 per cent of claimants.
Those with A-levels or the equivalent, but who had not gone to university, numbered 1.1 million and accounted for one in five (20.6 per cent) of claimants.
The figures come as more graduates face earning the minimum wage, with the salary gap between university leavers and the country's lowest earners disappearing.
Rapid increases in the National Living Wage mean a full-time worker on the UK's lowest salary now earns £25,500. Meanwhile, one in 10 graduate roles were advertised at £25,000 at the end of last year, according to Indeed data.
'Students being promised the moon'
Neil O'Brien, a Tory MP who is leading the party's policy development and obtained the data through parliamentary questions, said it showed 'the serious problems with both welfare and low-value university courses'.
He added: 'Students are running up huge debts, being promised the moon, but ending up on benefits.'
Helen Whately, the shadow work and pensions secretary, said: 'Today's graduates face the triple jeopardy of low-value degrees, a labour market crippled by Labour's job taxes and competition with AI for entry-level roles.
'The Government needs to grip this challenge. Their failure to reform welfare and economic mismanagement threatens the future of a new generation. Meanwhile, the taxpayer is footing the bill for unpaid student loans and graduates on benefits.'
The Government noted that 87.6 per cent of graduates were in employment – compared with 68 per cent for non-graduates. Some 67.9 per cent of graduates were in high-skilled employment – compared with 23.7 per cent of non-graduates.
A government spokesman said: 'We remain committed to our principles to reform the welfare system – those who can work should work and if you need help into work the Government should support you.'
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