The research conducted by YouGov also found almost three quarters of young jobless believe finding work is harder than ever, while almost one in three do not believe they will find a job in the next six months.
While the report reveals a bleak picture for the young unemployed, those who are self-employed are increasingly positive. 55% of the young entrepreneurs surveyed are more positive about their career now than they were this time last year.
The research indicates that self-employed young people are significantly more positive about their future than their peers. These young entrepreneurs are also twice as likely as their unemployed peers to believe they will "succeed in life". More than one in three young people who have been unemployed (38%) have considered starting a business as a route out of unemployment.
Martina Milburn, chief executive of The Prince's Trust said: "It remains a difficult time for the young unemployed and the longer they are out of work the more likely they are to sink into a spiral of disappointment and depression. Setting up in business can be an escape route out of the dole queue for these young people - and a route to success.
"Many of the disadvantaged young people we have helped have gone from joblessness to being their own boss and employing others too."
Almost half (48%) of self-employed young people said starting their own business is the best decision they have ever made and more than half (51%) said they would recommend starting a business to unemployed young people. Of the self-employed young people surveyed more than one in ten (13%) said they set up in business because they could not find a job.
The research, based on interviews with 2,000 16 to 30 year-olds, also shows how more than a third of unemployed young people (36%) claim they have not received any responses to job applications in the past year. Three in five (61%) describe looking for work as "demoralising".
The Prince's Trust is encouraging unemployed young people to consider self-employment through its new A-Z of Young Businesses, which celebrates young people from across the UK who have bucked the trend of unemployment by setting up on their own.
The A-Z of Young Businesses, which is supported by RBS, showcases 26 of the young people who have been supported into business by The Prince's Trust Enterprise programme in the face of rising unemployment.
Chris Sullivan, chief executive corporate banking at RBS, said: "RBS is proud to continue to support The Prince's Trust Enterprise programme which is proven to help young people set up business. This is particularly important in the current economic climate and I hope this will inspire any young unemployed person to consider self-employment."
The Prince's Trust & RBS A-Z of Young Businesses is being released daily on The Prince's Trust Facebook page. Visit facebook.com/princestrust.
