Hi! There are several options for your son.
First of all, though the law says he must be in some form of education or training until his 18th birthday, at this moment that's totally theoretical. No penalties apply for noncompliance. Since the legislation is in place, the government could now very easily introduce penalties at any time in the future, but I personally don't think that's imminent. The fact that in some areas they haven't been able to provide suitable educational placements for all over-16s means it would be politically embarrassing to criminalise young people who are literally unable to comply. So, he could just leave education and get a job if he can find one.
He could do some combination of work and home education if he is feeling ready to engage with education. Possibly he would do better if he has a break from formal education and a chance to try his hand at different jobs and think about his future. If he discovers his lack of qualifications is holding him back, he would then be motivated to work hard on the functional skills or whatever route he takes. College adult education will always be an option for English and maths at least. It's free to everyone who hasn't attained a "good" GCSE pass in those subjects, regardless of income or employment status. So the clock isn't ticking on that. However, some vocational courses have an upper age limit for funding and it may be wise for him to start by 18/19 if he wants to do them. He could look into that in a year or two just to make sure he doesn't leave it too late if that is what he wants to do.
If finances are tight, be aware that he cannot claim benefits until he is 18. In the meantime, you'd only be able to claim benefits for him if he were in full-time education. (Home education qualifies and can consist of informal hands-on learning, but unfortunately young people are only eligible if they were already home educated before 16. I think the benefits system is unfair about this rule, but that's the rule. A recent change to the rule is that young people with special needs can start being home ed after 16 and still get benefits.) So, assuming your son doesn't have special needs, there may be pressure on him to bring some money into your household if he isn't doing a programme of formal study. You are about to lose Child Benefit and any Tax Credits you may have been claiming for him.