Unpaid internships and living costs 'prevent' social mobility

The Sutton Trust estimates that 40% of 70,000 internships undertaken annually by young people are unpaid

Unpaid internships, combined with rising living costs, are shutting less-advantaged youngsters out of many careers, a social mobility study says.

The Sutton Trust estimates that 40% of 70,000 internships undertaken annually are unpaid - but young workers need a minimum of £1,019 per month to live in London and £827 in Manchester.

It has backed cross-party calls to ban unpaid internships over a month long.

The CBI said internships "boost" young people but that jobs "should be paid".

The study estimates that an intern wanting to fulfil a six-month internship in London would need a budget of £6,114 in London for living costs. A counterpart in Manchester would require £4,965.

It says 10,000 young people take up an unpaid internship a few months after graduating, with 20% of these in an unpaid capacity.

Law not being enforced

Under current UK law, an intern who carries out work which is of value to their employer, and is given set hours and responsibilities, is likely to qualify as an employee and therefore be entitled to the minimum wage.

The report says that these rules actually make the majority of current unpaid internships illegal - but employment law is not being properly enforced.

No prosecutions have ever been made in relation to interns and the minimum wage.

• What is it like to be an intern?

The Trust warns the lack of any financial recompense from many internships threatens to push "many less advantaged people out of careers", particularly as internships are increasingly seen as a "requirement" before a first job in top professions.

Examples of unpaid internships advertised online this month include a major fashion designer wanting someone for up to three months in the lead-up to London Fashion Week, and an MP offering to pay a researcher his or her expenses but nothing more, the study found.

The report also expresses concern over the lack of transparency around internships, with many not publicly advertised and sourced through informal networks inaccessible to underprivileged young people.

The Sutton Trust wants to see interns being paid at least the minimum wage and "ideally" the Living Wage.

Sir Peter Lampl, chairman of the Sutton Trust, said: "This practice locks out young people without connections."

He said internship candidates should be recruited and selected to the "same standards" as any other job

"Failure to do so prevents young people from low and moderate-income backgrounds from accessing jobs in some of the most desirable sectors such as journalism, fashion, the arts and politics," he added.

The concerns of the report echo the Taylor review into modern working practices which branded unpaid internships an "abuse of power" by employers and "extremely damaging" to social mobility.

In a bid to tackle the problem, the Trust is backing a bill by Conservative peer Lord Holmes of Richmond to tighten legislation and ban unpaid internships over four weeks long.

The Trust is calling for interns to be paid "at least" the national minimum wage - currently £7.05 per hour for under-25s - and ideally the Living Wage, which is £8.56 per hour, rising to £10.20 in London.