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One in 10 young Brits 'have nothing to live for'

As youth unemployment continues to be an issue in Britain, new research has warned of the health impacts of joblessness among young people, with some 40 percent of those surveyed reporting symptoms of mental illness.

A YouGov poll conducted for the Prince's Trust Macquarie Youth Index found that nine percent of 16 to 25 year olds felt they "have nothing to live for" – with that figure increasing to 21 percent among the long-term unemployed.

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(Read more: UK unemployment falls, putting rate hike in focus)

The survey of over 2,100 young people also found that the jobless were particularly prone to experiencing mental illness, with 40 percent reporting symptoms including suicidal thoughts, feelings of self-loathing and panic attacks because of the inability to find a job.

There were 1.07 million 16 to 24 year olds in the U.K. who were not in education, employment or training between July and September 2013, according to the most recent data released in November. This was down 19,000 from April to June.

It comes against a backdrop of an improving economic picture in Britain, which saw its unemployment rate fall faster than expected in the three months to October. The headline rate fell to 7.4 percent – its lowest level in four and a half years – and employment rose by 250,000 to a new record high of 30.086 million.

(Read more: UK growth to beat pre-recession peak in 2014: BCC)

Meanwhile, economic growth in the U.K. is expected to beat its pre-recession peak in the second half of next year, according to the British Chambers of Commerce (BCC). The business lobby group upgraded its short-term gross domestic product (GDP) growth forecasts for the country, from 1.3 to 1.4 percent for 2013 and from 2.2 to 2.7 percent for 2014.

Is the UK's employment picture getting brighter?

But despite growing evidence that the U.K. economy is picking up, the Confederation of British Industry's (CBI) Director-General John Cridland warned in his New Year's message that economic growth needed to be balanced so that everyone benefited, and stressed a need to ensure higher-skilled work training for individuals.

The Prince's Trust warned that more than 430,000 of the country's jobless young people could face long-term unemployment. Among those already long-term unemployed, 25 percent had been prescribed anti-depressants and 39 percent had felt suicidal, according to the survey.

"It is these young people that urgently need our help, "Martina Milburn, CEO of the Prince's Trust, said in a statement. "If we fail to act, there is a real danger that these young people will become hopeless, as well as jobless."

Shirley Cramer CBE, CEO of the Royal Society for Public Health, said the research proved unemployment was a public health issue, adding that it "must be tackled urgently."

—By CNBC's Kiran Moodley. Follow him on Twitter @kirancmoodley