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The Cost of Youth Homelessness

Through this research we wanted to provide an economic justification for the money spent on supporting homeless young people and show the enormous benefits that can be generated.

For over 50 years, Centrepoint has supported homeless young people to access stable housing, gain skills and employment and achieve their goals. In doing this, Centrepoint has witnessed the human cost of homelessness, and seen how it affects young people who, through no fault of their own, have limited or no access to safe and secure accommodation.

Through Centrepoint’s direct work with young people, we recognize their incredible potential. However, too often the barriers created by homelessness make it harder for them to achieve their goals.

In this way, homeless young people regularly have few options but to access costly public services and support from third sector organisations as a means of promoting their independence.

In our latest research report, Human Costs and Lost Potential: The Real Cost of Youth Homelessness, we tried to estimate the true cost of the crisis affecting thousands of young people.

Our findings

Overall, we estimated that the total annual cost of homeless young people amounts to £8.5billion, an average of £27,347 for each young homeless person, equivalent to the average salary of a police officer.

£8.5bn - the total annual cost of youth homelessness

 Cost Percentage   
 £5.5bn 64.8% Output loss due to Inactivity/Unemployment 
£846m 9.9% Criminal justice
£492.6m 5.8% Homelessness services
£478.1m 5.6% Lower productivity
£473m 5.5% Social security
£456.1m 5.3% NHS health services
£140.9m 1.7% Mental health services
£124.5m 1.5% Substance misuse services


Losses from missed opportunities are more than double the direct costs for the government

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Multiplier effect of 2.4

Each additional pound spent by the government in services to support homeless young people can generate benefits that are more than double what is spent.

While experiencing homelessness, young people cannot access employment and contribute to national economic output due to multiple challenges. This is a huge loss for society in both the short and long term, and represents 70% of the total costs associated with homeless young people.

“When I was homeless, I struggled with missing shifts because of having to go to different places from wherever I was sleeping to leave my stuff. It would’ve been helpful to have someone checking on me, chat to get out of that state and into work mode. Work was my only sense of normality, but to get in trouble for the missing shifts really didn’t help.” Emily, 26 from Manchester
Young person with two high rise buildings in background

Guidance for employers

Centrepoint has developed the following guide for employers to support vulnerable young people into employment.

Read the guide for employers

Our recommendations

  • Provide under 25s living independently with the same Universal Credit rate received by over 25s. The Universal Credit standard allowance for under 25s is over £16 less a week than that for over-25s. However, young people under 25 living independently experience the same issues and face the exact same living costs as someone over the age of 25.
  • Make work pay in supported housing equalising the taper rate for people in supported accommodation by decreasing the 65 per cent taper rate for Housing Benefit to 55 per cent, as well as increasing the applicable amount that young people can earn before losing their full Universal Credit allowance. We estimated the total benefits generated by this policy change to be over £12 million, with savings for the Treasury, as well as increased employment for thousands of young people living in supported accommodation.
  • Provide grants to apprentices and those on traineeships aged 16 to 25 who cannot live at home to help cover the costs of travel, other work-related expenses as well as their living costs. The low minimum wage for apprenticeships is insufficient to cover the costs of independent living, and traineeships are completely unpaid. Additional financial support is required to ensure that apprenticeship and traineeship programmes, which can have positive, long-term labour market returns, are accessible to these groups.
  • Invest in further promoting and making traineeships more accessible, as a vital stepping stone for those young people who are ready to enter the workplace but need to build skills and experience. Supporting young people to complete qualifications would provide them with an earnings premium in later life and increase their chances of finding better paid, stable employment.
  • Increase resources for underfunded services. Some services, e.g. mental health support, have been historically underfunded and it is not surprising they represent only a small fraction of the total costs associated with youth homelessness as many young people are not even able to access them.
  • Make sure age-disaggregated data for the expenditure of every government service is available and accessible to all. Accessible and good quality data on young people is very challenging and no review and control on public services can be successful without this crucial information.

Email your MP

We have been advocating for this since the 1970s, but surely £8.5bn is now too much to ignore. We believe supporting homeless young people is not only a moral duty, but it is a huge economic opportunity for the government.

Stand with us as we push MPs to take urgent action to end youth homelessness. Ask your MP to sound the alarm by reading our latest report and raising its findings in Parliament.

Email your MP now