More than seven out of 10 19-year-olds now achieve the equivalent of five good GCSEs, surpassing the Government target.
Last year's pass rate of 71.4 per cent beat the target of 69.3 per cent.
This represents a rise of 5 percentage points - or 40,000 teenagers - since 2004, when 66 per cent passed level 2 qualifications, which the Government regards as essential for employment.
Jim Knight, the minister for 14-19 learning, said: "This is fantastic news for the thousands of young people who have knuckled down and committed to hard work to gain these qualifications.
"It not only means that they can look forward to a brighter future, but that employers will benefit through a more skilled workforce."
By 2013, the Government expects 85 per cent of 19-year-olds to gain the equivalent of five GCSEs at grades A* to C. Those who reach this standard are 88 per cent more likely to find skilled jobs and earn an average of Pounds 1,700 a year more when they start than lesser qualified people, the Learning and Skills Council says.
It claimed the results showed the success of the education maintenance allowance for young people of up to pound;30 a week. Melanie Hunt, its national director of learning, also paid tribute to teaching staff.
"The lecturers and teachers in further education, as well as employers who offer apprenticeships and other work-based learning, have done a fantastic job in ensuring that young people get the learning and training they need to achieve these qualifications," she said.