*I'm worried that we are going to get a large proportion of 16+ year olds who will never be able to hold down a job/have severe mental health problems/be able to form good relationships with others/be able to make their own families/be able to live away from home.
Employers are not forgiving if you get to your mid 25s without still being in full time education or having previous work experience. Why would they employ someone who looks workshy on paper when they can just employ someone fresh out of school?*
The situation is awful for young people, and the sheer incompetence of the government in general and Gavin Williamson in particular haven't helped. This is likely to have long-term effects on young people's mental health. But we should not catastrophize. People do not have to do everything at the conventional time, or they'll never do them at all. (As shown for example by the fact that different countries start formal schooling at different ages, but it has little impact on pupils' ultimate performance.)
It's difficult to know what the ultimate effects will be, without having a crystal ball. There are at present no middle-aged or older adults who went through 2020 in their youth. But I am perhaps an approximation of that, and can give my perspective.
Due to a chronic illness which went undiagnosed for much of my childhood and adolescence, and then initially required immunosuppressants (hasn't for a while though - hence I'm Category 6 rather than Category 4 for the vaccine); and due to having had an extremely clinically vulnerable family member for much of my early adulthood, I spent many years with 'every year being 2020'. The best it got was something like Tier 2; too often it was like lockdown. Fortunately, things improved dramatically as I got older and I'm one of the few people who is healthier and more vigorous in middle age than in my late teens (at least if Covid, or some other illness when the NHS is overrun, doesn't come along to ruin that).
As far as permanent effects on me. I won't say that there are none, or that it's all roses. I have certainly been left with health anxiety, and this year has brought out something like mild PTSD in me. I was also left with some social anxiety, though that may be more due to my being 'different' for much of my youth than to the restrictions themselves. BUT I managed to obtain good exam results, hold down a job, live away from (original) home, have lots of friends, don't have severe mental health problems, etc. etc.
I know others with somewhat similar experiences, though, perhaps surprisingly, I don't think that there has been systematic research into the long-term effects of health-related isolation,
As for employers: while they may indeed be suspicious of unexplained gaps in the CV, or of people who've just been faffing about doing nothing when others have been working, they are aware of what happened in 2020 (many will themselves have had to shut their businesses for a while, after all) and won't be surprised that the young people won't have the same experiences that earlier, or, we hope, later generations will have had. They may be impressed by the current generation's experience of independent study, rapid acquisition of computer skills, adaptability to rapid changes, etc.
Sadly, young people do have reason to worry that their employment prospects will be uncertain due to a shrinking economy, due to both Covid and Brexit. But I don't think that employers will hold their experiences against them. There may, sadly, just not be as many employers.