The Prince’s Trust Macquarie Youth Index, based on a survey of 2,194 respondents aged 16 to 25, found that the happiness and confidence young people feel in their emotional health has dropped to the lowest levels since the study was first commissioned in 2009.

According to the Index, which gauges young people’s wellbeing across a range of areas from working life to family relationships, the happiness young people experience in relation to their emotional health has plummeted by four points in just one year, from 61 to 57.

When asked to describe how they feel, 61% of young people said they regularly feel stressed, 53% said they regularly feel anxious and 27% go as far as to say they feel hopeless on a regular basis. Furthermore, 47% of young people say they have experienced a mental health problem.

This is one of the biggest drops in any area attributed to wellbeing ever recorded by the Index, and is a score which has fallen considerably since 2010, when it stood at 70. Confidence in future emotional health is also down by two points this year, to 65 – the lowest level so far.

The report also shows that almost half of young people (42%) think they put too much pressure on themselves to achieve success.

Almost two thirds of young people (61%) agree that having a job gives (or would give) them a sense of purpose, and half (49%) think that having a job is good for their mental health.

Nick Stace, UK chief executive at The Prince’s Trust, said: “It should ring alarm bells for us all that young people are feeling more despondent about their emotional health than ever before. This is a generation rapidly losing faith in their ability to achieve their goals in life, who are increasingly wary of and disillusioned with the jobs market and at risk of leaving a wealth of untapped potential in their wake.

“One of the most important things we can do to stem this flow is to show young people that it’s worth having high aspirations, that opportunities to earn a good living and progress in a career are out there and that they’ll be supported along the way to live, learn and earn.

“For this to happen, it is vital that government, charities and employers across the UK invest more in developing young people’s skills and in providing opportunities for them to progress in fulfilling, sustainable careers. Underpinning this should be commitments to initiatives that promote positive mental wellbeing, such as Time to Change, that create a culture of openness and in which young people do not feel like they have to face their problems alone.

“Together, we can provide the practical and emotional support required to bring a generation back from the brink of futility, start a nationwide debate about their stake in society and empower all the positive contributions they can make to it.”