Exodus from workforce costs UK ‘£16bn a year’ in lost tax receipts

The study found an increasing number of young people who have never worked. Photograph: Mixmike/Getty Images

The UK has suffered the biggest contraction in its workforce since the 1980s, costing the public finances at least £16bn a year in lost tax receipts, according to a study.

Hundreds of thousands of people have quit the labour market since the pandemic and never returned, undermining the strength of the economy and leaving the government out of pocket, according to the Institute for Employment Studies.