Increasing numbers of graduates are having to take on multiple unpaid internships as they strive to get their foot on the ladder in sectors such as the arts, according to a new report.

Conducted by social mobility foundation Sutton Trust, the Pay As You Go report described the arts sector as “problematic”.

The study found that almost 90 per cent of work placements in the arts are unpaid, forcing many graduates to lean upon friends, family and a second job to get by. For those from lower to moderate income backgrounds, this can often mean not even attempting to gain experience in a sector that they are interested in as a career.

"This is a huge social mobility issue. It prevents these young people from getting a foot on the ladder," said Sir Peter Lampl, founder of the Sutton Trust and chairman of the Education Endowment Foundation. "In order to help tackle this situation, internships should be advertised, not offered through informal networks. This locks out the many young people who don’t have connections."

The arts sector is "one of the most problematic sectors" according to the report. Almost 90 per cent of internships were found to not be paying minimum wage, and there were high rates of placement per person, with 32 per cent of interns completing three or more work placements. Working class graduates are substantially under-represented, and more than a third of placements show none of the characteristics of a "good internship". Compounding this, there are high rates of unemployment and low salaries among former arts interns.

There is also confusion among employers and graduates as to the current law on unpaid internships, the report suggests. Under national minimum wage legislation, interns must be paid if they are expected to work set hours or on set tasks. Up to 50 per cent of employers and 37 per cent of graduates in the Sutton Trust survey were not aware that such internships, if unpaid, are likely to be illegal.

"The legal grey area around internships allows employers to offer unpaid internships with impunity," said Lampl. "We're advocating that all internships over four weeks should be required to pay at least the National Minimum Wage and preferably the Living Wage."