Its study of more than 2,000 16 to 25-year-olds found poor exam results are causing thousands of young people to "abandon their ambitions".
The research, which was supported by HSBC, comes two weeks before thousands of young people will collect GCSE and A-level results.
It found one in six young people believe they will end up on benefits, and this increases to more than a third among those leaving school with poor grades.
"Thousands of young people's ambitions are crushed by exam results each year," said Martina Milburn, chief executive of the Prince's Trust.
"Many of these young people have faced problems at home or bullying at school so their exam results don't reflect their true potential."
The trust is calling on employers, charities and the Government to provide vocational support and training that will help young people find employment.
"Without this, thousands will struggle to compete, leaving them hopeless and jobless," said Milburn.
The Prince's Trust offers support for disadvantaged 13 to 30-year-olds who are unemployed or struggling at school and at risk of exclusion. It gives them practical and financial support to help them move into employment.
