The Sutton Trust is calling for internships to be properly advertised and paid if they last longer than one month.
New research by educational charity the Sutton Trust has found that unpaid internships now cost a single person in London a minimum of £1,019 per month in living expenses. The cost is £827 a month in Manchester. This excludes transport costs that are often paid by employers.
The Trust's new report, Internships - Unpaid, unadvertised, unfair, concludes that these living costs are shutting many less advantaged young people out of careers where unpaid internships are the primary route into a profession.
Research carried out for the TUC found that four in five (78%) of 18-34 year olds could not afford to live in London away from home to become an unpaid intern.
There are around 70,000 internships each year. Sutton Trust analysis estimates that 10,000 graduates are in internships six months after graduation and over 40% of young people who have carried out an internship have done at least one of them unpaid.
The report acknowledges that there have been "moves in the right direction" by some employers. However, it says a wide range of organisations continue to advertise for unpaid interns online and through informal networks, from fashion designers to MPs.
Minimum wage legislation makes many unpaid internships illegal, but there have been no recorded prosecutions in relation to interns and the National Minimum Wage.
The Trust is backing a bill aimed at tightening minimum wage legislation to ban unpaid internships over four weeks in length. The Trust would like to see all internships longer than one month to be paid at least the National Minimum Wage and ideally the Living Wage.
The Trust is also recommending that internships should be advertised publicly and that recruitment processes should be fair, transparent and based on merit.
Sir Peter Lampl, founder and chairman of the Sutton Trust and chairman of the Education Endowment Foundation, said: "All internships over four weeks should be paid at least the minimum wage of £7.50 per hour. Failure to do so prevents young people from low and moderate-income backgrounds from accessing jobs in some of the most desirable sectors such as journalism, fashion, the arts and politics.
"All internship positions should be advertised publicly. Large numbers of internships are never advertised and instead offered through informal networks. This practice locks out young people without connections."