The 53 per cent of school leavers who opt not to got to university or do A levels are often allowed to "drift" into their first job or further education with no real prospect of progression, a House of Lords study has found.
The Lords committee on social mobility said the national curriculum should finish at 14, allowing students time to focus on the transition to a career before leaving school.
Its report, Improving the Transition from School to Work, said: "The current system for young people who do not follow an academic route is complex and incoherent, with confusing incentives for young people and employers.
"Careers advice and education are being delivered in a way which means that too many young people simply drift into further studies or their first job, which often has no real prospect of progression."
The report continued: "Transitions to work take longer for some young people, and this is not recognised in the current format of 16-18 or 16-19 education.
"It would be better for the national curriculum to stop at age 14, rather than 16, and for a new 14-19 transition stage to be developed.
"This would enable a tailor-made route to work to be developed. Such a route would combine a core element with either academic or vocational elements."
The report added that there is currently too much focus on apprenticeships, which are taken up by 6 per cent of 16-18-year-olds.
The committee also recommends that responsibility for careers advice should be moved away from schools and colleges and given to an independent careers advice and guidance service.
'It's just gobbledygook'
The government should establish a Cabinet-level minister to oversee the transition from school to work for young people, a responsibility which currently falls between a number of departments and ministers.
Chair of the committee Baroness Corston said: "The current system for helping people move from school to work is failing most young people. They are simply not being adequately prepared for the world of work. This significantly disadvantages a huge number of young people and limits their opportunity for social mobility.
"A young person considering their options for further education or employment is presented with gobbledygook. It is totally unclear to them how they can get the skills needed for a successful career. It is also unclear to the people in their lives giving them advice and support in making these crucial decisions."
The Association of School and College Leaders said it agreed with the Lords' report.
Malcolm Trobe, ASCL's interim general secretary, said: “The intense academic focus of the existing curriculum is too narrow for some students and a new approach is needed.
"In our blueprint for a self-improving system, we called for the establishment of an independent commission to design a broader, richer curriculum which is fit for all. The education secretary has rejected this proposal, but we hope that the select committee’s report may encourage her to think again."