Employers across England are being encouraged to invest in young talent as new apprenticeship funding and financial incentives become available.
The changes form part of the government’s Growth and Skills Levy reforms, which aim to create 50,000 additional opportunities for young people while helping businesses develop the skills they need.
For employers considering recruiting an apprentice, the new support could significantly reduce the cost of training and employing someone at the beginning of their career.
New £2,000 payment for smaller employers
From 1 October 2026, eligible non-levy-paying employers can receive a £2,000 payment when they recruit a new apprentice aged between 16 and 24.
The payment will be made through the employer’s training provider in two instalments. The first will be paid after 90 days, with the second normally following after one year.
This support is aimed particularly at smaller employers that may want to recruit an apprentice but are concerned about the initial costs involved.
Apprenticeship training fully funded for under-25s
The government will also cover 100% of the training costs for eligible new apprentices under the age of 25.
This applies to both levy-paying and non-levy-paying employers, removing another significant cost associated with recruiting younger apprentices.
Employers will also usually be exempt from paying employer National Insurance contributions for apprentices under 25, provided the apprentice meets the relevant requirements.
Additional payments may also be available
Depending on the apprentice and programme, employers may be able to access further financial support.
This includes a £1,000 payment for employing an apprentice aged 16 to 18, or an eligible apprentice under 25 with an Education, Health and Care plan or who has been in local authority care.
Employers recruiting an eligible foundation apprentice can receive an additional £2,000 incentive. A separate £3,000 Youth Jobs Grant may also be available when employing an eligible person aged 18 to 24 who has been unemployed and receiving Universal Credit for six months or more.
The government has confirmed that employers can claim more than one of these payments where all the relevant eligibility conditions are met.
An opportunity to build a future workforce
Apprenticeships allow employers to recruit people with the potential to develop alongside their organisation.
By combining paid employment with structured training, businesses can shape an apprentice’s knowledge and skills around genuine workplace requirements. This can help address skills shortages, support succession planning and create a more diverse talent pipeline.
With training costs covered and new recruitment payments becoming available, the reforms could make this an ideal time for smaller businesses to explore apprenticeships for the first time.
Employers should speak to an approved apprenticeship training provider before recruiting. The provider can explain which programmes are available, confirm eligibility and help the employer access the appropriate funding.
The new funding arrangements described apply to apprenticeships in England. Different apprenticeship funding systems operate in Scotland, Wales and Northern Ireland.
