Unless action is taken to build new rules of commitment in the home, the workplace and politics, there is a risk of "social unravelling, affecting everything from crime to everyday behaviour", it argues in a report on the lives and values of Britain's youth.
The social policy researchers Dr Geoff Mulgan and Helen Wilkinson found more than one-third of 18- to 24-year-olds take pride in being outside the system and are losing their attachment to national identity.
They describe a generation that inherited "unprecedented freedoms but is living in an increasingly unstable environment, with chronic relationship breakdown, uncertainty about jobs and profound disconnection from the political process".
There are major gaps between the generations on attitudes to authority and tradition and, the authors argue, these "fragmenting values" pose an acute problem for political parties, which are no longer seen as offering solutions to the problems. "Politics has become a dirty word."
In the short-term, if young people do not vote, their views do not count and this reinforces the complacency of older people, the study says.
"But in the long-run, this disconnection is not just about votes - it is also about social cohesion and people's willingness to play by the rules ... what we have described as the `underwolves' - the underdogs who are now biting back - have the capacity to ruin pretty much everyone's quality of life."
The report, Freedom's Children: Work, Relationships and Politics for 18-34-year-olds in Britain Today, highlights conflicts between the generations as a danger for the future.
It says today's youth sees a contrast between increasingly wealthy old people and younger people suffering unemployment and negative equity, at a time when the political system is losing its ability to forge links across the generations.
Other countries have already seen a political backlash against the drift of public spending towards the elderly, the study argues. This could be echoed in Britain, where the young fear they will be squeezed on pensions - having to fund their own while paying through taxes for the pensions and care of their parents.
Single parents are one of the most alienated groups, less likely to be in work and more likely to live in poverty than families with two parents. They are "all too often stigmatised in policy debates as being a burden on the state" although three-quarters of young women believe single mothers can bring up children as well as a couple.
Insecurity in the jobs market is also contributing to the instability. Only one-third of 16- to 24-year-olds have a union in their workplace and more than four times as many 16- to 24-year-old men are in temporary jobs as any other age group.
However, most young people remain optimistic and see their lives as better than those of their parents, the authors say, and the position of women continues to improve.
To help counteract political disaffection, the report recommends making voting obligatory and extending polling over a week with polling stations in places like shopping centres.
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