Unpaid internships to be banned?

On 17th July 2025, the government issued a Call for Evidence to gather views on how unpaid internships affect young workers. Despite being largely illegal, these placements still exist. While internships offer valuable experience to young people as they build their careers, they become problematic when they are unpaid or remunerated at below the National Minimum Wage. This is because they offer opportunities to people based on their financial circumstances rather than their talent.

Why a consultation on unpaid internships?

Much of the impetus for the consultation comes from a Sutton Trust report, published on 23rd January 2025. Unpaid and underpaid internships made five key recommendations:

1. Unpaid internships that are longer than four weeks should be banned
2. HMRC should promote information on internships and the National Minimum Wage, ensuring employers are aware of young workers’ rights
3. All interns should be paid at least the National Minimum Wage or, preferably, the National Living Wage.
4. All internship positions should be advertised publicly
5. Recruitment processes should be fair, transparent and merit based

The report also noted some key statistics:

• 51% of graduates have completed at least one internship
• 35% have completed an unpaid or underpaid internship
• 59% of employers offer internships, rising to 80% in London
• 37% of interns are paid the National Minimum Wage, with 23% getting the National Living Wage
• 1 in 5 internships are unpaid
• Middle-class graduates are much more likely to undertake an internship compared to their working class peers
• Just 1 in 10 internships are found via an open advertisement
• 40% of unpaid interns rely on family members to fund their role

What does the consultation seek to do?

The government’s consultation has three main aims. Firstly, it wants to collect evidence that will help it to better protect young workers from being exploited by illegal unpaid internships. Secondly, it wants to tackle the issue so that interns are paid. Thirdly, it wants to deliver on a commitment to stop employers breaking the rules concerning unpaid internships.

Which unpaid internships are currently banned?

Currently, all unpaid internships are banned unless they are part of an education or training course. However, significant numbers of employers ignore these rules and many interns are unpaid or paid less than the National Minimum Wage.

How can I respond to the consultation?

You can respond to the consultation online via this link. You can also learn more about the consultation and other ways to respond by reading this pdf file. The consultation closes on 9th October 2025.

When will the law regarding unpaid internships change?

If the government decides to change the law regarding unpaid internships, it will happen during 2026 at the earliest. However, it is very likely that the law will change. Business Secretary Jonathan Reynolds has said:

“Our Plan for Change seeks to break down barriers to opportunity, which is why we will strengthen protections for younger workers so that internships are accessible to everyone, ensuring they have the foundations to build a strong and successful career.”

I have interns. What should I do?

If you have or want to hire interns, your first priority is to make sure you are complying with the current law. In most cases this means paying them the at least the National Minimum Wage. If you need help with your payroll, we can help you. Get in touch today to learn more.