The 2012-13 Reserves season saw a major shake-up in the English youth Leagues, with the regional Premier Reserve Leagues being replaced by national Premier Under 21 Leagues. As such, this season largely saw the Reserves compete as the Liverpool Under 21s. Liverpool also fielded an Under 19 squad to compete in the European NextGen Series for the second year running. In November 2012, manager Rodolfo Borrell was promoted to the position of Head of Academy Coaching and was replaced by Alex Inglethorpe. Inglethorpe's first game in charge was the 3-0 win over Borussia Dortmund in the NextGen Series on 28 November 2012. Liverpool completed the First Group Stage of the League campaign as the country's only unbeaten team. This saw Liverpool qualify for the Elite League stage of the U21s and, although the team failed to maintain their high standards from the First Group Stage, they did enough to finish third in the group and qualify for the Final Stage of the U21 League system. The Final Stage saw the top three teams from the Elite League plus the winners of the Qualification League- comprised of teams who finished in midtable from their respective First Group Stage leagues- face each other in a semi-final tie followed by a final to determine the overall League champions. Liverpool drew Manchester United in the semi finals and lost 3-0 at Old Trafford in the one-legged tie to finish their Premier U21 League campaign in joint-3rd place.
Liverpool's NextGen Series campaign began in poor fashion. The Reds lost their first three games in the Group Stage and as such appeared to be crashing out of the competition at the first hurdle. They came back strongly however and won the remaining three, including a tie against reigning champions Inter Milan. Although Liverpool finished third in their Group, they qualified for the knock-out round as the highest-ranked third placed side from the Group Stages. In the round of 16, Liverpool faced a familiar opponent from the previous season in Sporting Lisbon and, as with their previous encounters, Lisbon had little difficulty dispatching the Reds as they brought Liverpool's European campaign to a close.
Liverpool's season was punctuated during the winter with a trip to Singapore to compete in the NexLions Cup. Only three other teams took part in the tournament in which Liverpool beat the home nation in a semi-final encounter before losing to Sporting Lisbon in the final.