Young workers ‘bouncing’ in and out of employment due to their mental health expected to miss out on £9.9bn in lost earnings a year

• Cebr estimates young workers could be missing out on £16.5 billion in expected annual gross earnings because of moving in and out of employment, with more than half of this - £9.9 billion - attributable to mental health
• Three quarters (75%) of young workers have experienced a period when work had a significant negative impact on their mental health or wellbeing
• 39% have taken time off because of mental health issues while 15% have left work altogether for a period
• AXA Health calls for greater focus on helping young people remain in work, including preparing them for the realities of working life and intervening earlier when problems emerge

17 September 2026: Young workers moving in and out of employment could be missing out on  £16.5 billion in foregone earnings each year. More than half of that figure - £9.9 billion – is attributable to mental health, according to new economic analysis commissioned by AXA Health, which supports the health of more than two million people in the UK and works with employers of all sizes – from large corporates to micro firms – across all parts of the economy.

The analysis by the Centre for Economics and Business Research (Cebr) examines “labour market bouncing”, defined as temporary periods of at least one month outside paid employment. It finds bouncing is most common at the earliest stage of people’s careers, with more than two in five people (44%) experiencing at least one period, of a month or more, outside employment during the previous three years.

The findings are published as part of Starting Out, Staying In: Building the confidence and conditions for young people to develop healthy, sustainable careers a new report from AXA Health examining young people’s experiences during the formative years of working life and what can help them build healthy, sustainable careers.

The report comes as government focuses on getting more young people into employment, reducing economic inactivity and preventing ill health from pushing people out of work. AXA Health says prevention needs to start earlier, with greater attention paid to what helps young people remain healthy and in work once they get there.

Research among UK workers aged 18 to 30 for the report found three quarters (75%) have experienced at least one period when work had a significant negative impact on their mental health or wellbeing, with 44% saying this has happened more than once. More than a third (39%) have taken time off because of the impact work was having on their mental health or wellbeing, 27% have considered leaving work and 15% have left work for a period.

Problems are also often recognised only after they have begun to escalate. Among those whose mental health or wellbeing had been significantly affected by work, just 19% recognised the problem at the first signs. Almost a quarter (23%) only realised when they felt close to burnout, while 20% recognised it once the impact had begun affecting life outside work. In 12% of cases, somebody else noticed the change.

Heather Smith, Chief Executive Officer of AXA Health, said: “Getting more young people into work is rightly a national priority. But getting someone into a job is only part of the challenge - equally important is ensuring they feel supported, confident and able to build lasting, fulfilling careers.

Alarmingly, 75% of young workers have experienced a significant negative impact on their mental health due to work — a stark reminder that entering employment is just the beginning. When young workers move in and out of employment, it can be hugely disruptive, leading to lost income and opportunities. 

Creating a healthier, more sustainable working life for young people requires us all to come together.  We need to equip young people with the skills to navigate the realities of work and create workplaces that encourage an empathetic culture to better support mental wellbeing and encourage early intervention, so issues are addressed before they reach crisis point.

Together, we can build a future where young workers don’t just start their careers, they thrive in them.”

Dr Imren Sterno, Head of Mental Health and Consultant Clinical Psychologist at AXA Health, said: "One of the findings that stood out to me was how late many young people recognised that work was beginning to affect their wellbeing. Only 19% spotted the problem at the first signs, while others only recognised it when they were close to burnout or when the impact had spread into life outside work.

“That is particularly important early in a career. Experience helps us develop reference points for what reasonable pressure feels like, how we recover and when we may need support. Someone entering working life has had less opportunity to develop those personal guardrails. 

“We should prepare young people not simply to get a job, but to build a healthy relationship with working life. That doesn’t mean removing challenge or treating every difficult day as a mental health problem. It means helping people recognise when pressure is becoming harder to manage, raise concerns early and access clinically credible help when it is needed.”

The report sets out a series of recommendations for putting prevention into practice and addressing problems before they become harder to manage. These include:

• Preparing young people for working life, not simply getting into work. The Government and employers should work together to include working-life readiness as a clearer part of existing careers education, employability programmes, apprenticeships and transition-to-work support.
• Intervening earlier, before problems result in sickness absence or disengagement. The Government should accelerate efforts to make intervention before sickness absence part of implementation of the Keep Britain Working Review, and employers should build in regular opportunities to discuss how someone is managing and ensure they have the appropriate support.
• Giving managers the capability, capacity and backup to support healthy teams. Employers should equip managers to notice changes, listen, respond and signpost to appropriate support, while recognising that managers should not be expected to diagnose or treat mental ill health. The Government should also reflect this definition of manager capability through the Keep Britain Working Review.
• Making workplace health support easier to understand, trust and access. As the Government develops Workplace Health Provision through Keep Britain Working Review, provision should be judged not simply by whether a service exists, but by whether employees understand it, trust it and can realistically access it.
• We also urge Government to examine what support and incentives could enable more employers, particularly smaller organisations, to invest in workforce health and prevent ill health from contributing to sickness absence or labour-market exit.
   

The research also highlights the positive role work can play. Half (50%) say work has increased their confidence overall, while nearly two thirds (65%) say their current workplace experience has increased it.

However, many entered employment underprepared for some of the less visible realities of working life. While half felt well prepared when they first started work, only 13% felt very well prepared. More than a third (38%) wish they had been better prepared for achieving work-life balance, 27% for managing workload and stress and 25% for building confidence at work.

AXA Health is calling for greater emphasis on working-life readiness alongside traditional work readiness, helping young people prepare not only to enter employment but to navigate working life once there. As a Vanguard employer within Keep Britain Working, AXA Health is also contributing to the wider effort to understand how employers can help people remain healthy and economically active.