The announcement comes amid rising concern about youth inactivity. Nearly 946,000 people aged 16 to 24 are currently Neets – around one in eight of the age group – close to an 11-year high.
The DWP recently launched an investigation into why the figure is so stubbornly high.
The jobs market is particularly challenging for young people, with 2025 figures showing a falling number of vacancies and fewer people on payrolls.
Official stats on Neets include stay-at-home parents as well as jobseekers.
The majority of young people (580,000) who are Neets fall into the economically inactive category, compared to 366,000 who are unemployed.
A rise in long-term sickness among young people has been one of the main causes of economic inactivity over the past three years, according to research, external by the Youth Futures Foundation.
Youth Guarantee funding formed part of a wider welfare reform package in the Budget, where Reeves said the system should “protect people who cannot work and empower those who can”.
Forecasts released alongside the Budget by the Office for Budget Responsibility (OBR) predict relatively few inactive people returning to work before the next election, despite the changes.