My eldest dd turned sixteen last year, and ever since she's had difficultly proving her identity for all sorts of things. She often uses the train to get home from college. At 16 they charge adult fares (fair enough). Tried to get her a young persons railcard for discounted fares, but you need photo id to get a railcard. They'll accept a passport or a driving licence. DD doesn't have either, she's never travelled abroad, and not intending to in the near future, so no travel need for a passport. She isn't old enough to drive a car, so no need for a driving licence either. And if she could drive, she probably wouldn't need a railcard anyway!
So we looked at getting her a provisional driving licence early, purely so she could get a railcard. You near enough need a passport to get a driving licence these days though, can't complete the application online without one, the only other way to to it is by posting off paper copies of documentation (original birth certificate, verified photo etc).
My own passport expired over 20 years ago, and I had to upgrade my paper driving licence 10 years ago, so I do have that as photo id for myself. That does seem to be accepted by most places. There's an open day at the nearby military base coming up this summer, my dc would love it. You have to apply for tickets in advance, and I think they do a draw because it's always over subscribed. But, for security purposes, they require passports as proof of identity and nationality for everyone over 16. It's not clear if they'll accept my 30 year old, expired passport, and my dd won't be able to get in at all.
DD got herself a part time waitressing job last year. Because she was under 16 they would accept birth certificate as id luckily. If she'd started there after turning 16 she'd have needed passport or driving licence.
So if you don't drive and don't travel abroad, you still have to buy a passport or driving licence just to be able to live and work in the UK? I mean it's basically compulsory, yet we're being charged for it as well.