For employers looking to grow their workforce, apprenticeships offer a practical way to recruit motivated people and develop the skills a business needs. With significant changes to apprenticeship funding and a growing range of Government incentives now available, apprenticeships have become an even more attractive option for employers.
For many businesses, the biggest barrier to recruitment is cost. Hiring a new employee involves more than paying a salary. There are recruitment costs, training, equipment, National Insurance and the time involved in supporting someone as they settle into a new role. Government apprenticeship funding can help reduce some of these costs, making it easier for employers to bring new talent into their organisation.
The funding available depends on factors such as the apprentice’s age, the type of apprenticeship, whether the employer pays the Apprenticeship Levy and whether the apprentice meets certain eligibility criteria. Understanding the different forms of support available can help employers make more informed recruitment decisions and ensure they are not missing out on funding they could access.
Fully funded apprenticeship training for under-25s
One of the biggest changes to apprenticeship funding from 1 August 2026 is that the Government will fully fund apprenticeship training and assessment for eligible apprentices aged 16 to 24, up to the relevant funding band maximum. This applies to both levy-paying and non-levy employers, subject to the relevant funding rules.
For non-levy employers, this means the Government pays 100% of the eligible training and assessment costs for apprentices aged 16 to 24. Previously, employers who did not pay the Apprenticeship Levy could be required to contribute towards training costs in some circumstances. The change makes recruiting young apprentices considerably more accessible for businesses that want to develop new talent without taking on the full cost of apprenticeship training.
For levy-paying employers, apprenticeship training is normally funded through their Apprenticeship Service account. However, where a levy-paying employer does not have sufficient funds available, the Government will also fund 100% of eligible training and assessment costs for apprentices aged 16 to 24, up to the relevant funding band maximum.
It is important to remember that fully funded training does not mean the apprentice is free to employ. Employers are still responsible for paying the apprentice’s wages and meeting their normal employment responsibilities. However, removing the cost of eligible apprenticeship training can make a significant difference to the overall cost of developing a new employee.
The £2,000 apprenticeship hiring payment
From 1 October 2026, eligible non-levy employers can receive a £2,000 hiring payment when recruiting a new apprentice aged 16 to 24. The apprentice must meet the relevant eligibility requirements and have started their job with the employer within the previous three months.
The payment is designed to help employers with the costs associated with recruiting and supporting a new apprentice. According to the latest Government information, it is paid in instalments through the training provider, with the first payment available once the apprentice has completed the required period of employment.
For smaller businesses in particular, this can make taking on a new apprentice considerably more affordable. When combined with fully funded training for eligible 16 to 24-year-olds, the financial case for apprenticeship recruitment becomes even stronger.
The £1,000 employer payment
There is also an additional £1,000 payment available to employers in certain circumstances. This applies when an apprentice is aged 16 to 18, or is aged 19 to 24 and has an Education, Health and Care Plan or has been in care.
The payment is intended to help employers with the additional costs associated with supporting apprentices who may require additional assistance as they begin their careers. It can be used towards employment-related costs such as equipment, travel or uniforms.
The payment is made through the training provider in two instalments of £500, provided the apprentice remains employed by the business at the relevant payment points. Where an apprentice has an EHC plan or has been in care, the appropriate consent requirements must also be met before their status can be shared with the employer.
Foundation Apprenticeship employer incentive
Employers recruiting eligible Foundation Apprentices may also be able to access an incentive of up to £2,000.
Foundation Apprenticeships are designed to give young people valuable workplace experience while helping them develop the skills and confidence they need to progress into full apprenticeships and employment. The employer incentive is available in eligible circumstances for Foundation Apprentices aged 16 to 21, as well as certain 22 to 24-year-olds with an EHC plan, who have been in care, or who are in prison or leaving prison.
The payment is designed to support employers with the costs associated with employing a Foundation Apprentice and can be used for employment-related costs such as equipment, travel and uniforms.
For employers, Foundation Apprenticeships can provide an opportunity to engage with young talent at an early stage and develop people who could go on to progress into longer-term roles within the organisation.
The £3,000 Youth Jobs Grant
Another significant source of financial support is the £3,000 Youth Jobs Grant.
This can be available to employers recruiting an eligible young person aged 18 to 24 who has been unemployed and claiming Universal Credit for six months or more. Unlike some apprenticeship payments, the Youth Jobs Grant is available to employers of all sizes, provided the relevant eligibility requirements are met.
The grant is paid directly to eligible employers by the Department for Work and Pensions. Current Government information states that it is paid in two instalments: £1,800 after six weeks and £1,200 after 18 weeks.
Importantly, the Youth Jobs Grant can be combined with other eligible apprenticeship support. This means an employer may be able to receive the £3,000 Youth Jobs Grant alongside the £2,000 apprenticeship hiring payment where all relevant eligibility criteria are met.
For employers recruiting young people who meet the criteria, this can provide a substantial level of financial support.
Employer National Insurance relief for apprentices under 25
Apprenticeships can also provide savings through employer National Insurance relief.
Employers do not normally pay secondary Class 1 National Insurance contributions on qualifying earnings for apprentices under the age of 25, provided the apprentice meets the relevant requirements. For the 2026 to 2027 tax year, a 0% employer rate applies to qualifying earnings between the Secondary Threshold and the Apprentice Upper Secondary Threshold, which is £50,270 per year. Earnings above the relevant threshold are subject to the normal employer rate.
This is separate from apprenticeship funding and hiring incentives. It effectively reduces the ongoing cost of employing an eligible apprentice rather than providing a one-off payment.
For businesses considering several apprentices, the saving can become particularly valuable. Recruitment budgets can go further when employers are able to combine training funding, recruitment incentives and reduced National Insurance costs.
Employers should make sure the apprentice qualifies and that the correct National Insurance category and payroll treatment are used.
£3,000 care leaver bursary
There is also financial support available directly to eligible care leavers who start an apprenticeship.
Eligible care leavers under the age of 25 can receive a £3,000 care leavers’ bursary when starting an apprenticeship. This support is paid to the apprentice rather than the employer and is designed to help remove some of the financial barriers that can make starting a career more difficult.
Although this is not an employer incentive, it is important for businesses to be aware of it. Employers can play an important role in supporting care-experienced young people into meaningful employment, while the bursary provides additional financial support to the apprentice during their first year.
The bursary is separate from employer funding and does not need to be deducted from the apprentice’s wages or used to cover employment costs.
Can apprenticeship incentives be combined?
One of the most important things for employers to understand is that these different forms of support do not necessarily operate in isolation.
The Government’s current apprenticeship support package allows eligible employers to benefit from multiple forms of financial support for the same apprentice. For example, a qualifying non-levy employer recruiting a new apprentice aged 16 to 24 from 1 October 2026 may be able to access the £2,000 hiring payment, while the apprentice’s training and assessment can also be fully funded up to the relevant funding band maximum. The employer may also benefit from National Insurance relief where the apprentice meets the relevant requirements.
Where the apprentice meets additional eligibility requirements, further support may also be available.
This is why it is important for employers to look at the full funding picture rather than focusing on one individual incentive. Depending on the circumstances, the combined value of apprenticeship funding and employer support can be significant.
What about employers who pay the Apprenticeship Levy?
The funding process is slightly different for levy-paying employers.
Businesses that pay the Apprenticeship Levy receive funds through their Apprenticeship Service account, which can be used to pay for eligible apprenticeship training and assessment. If an employer has sufficient funds available, these funds can be used to cover the cost of apprenticeship training up to the relevant funding band maximum.
If a levy-paying employer does not have enough funds in its account, Government co-investment rules apply. For eligible apprentices aged 16 to 24 starting from 1 August 2026, the Government will fund 100% of eligible training and assessment costs up to the funding band maximum.
This means that businesses paying the levy should still consider apprenticeships as part of their wider workforce development strategy, particularly when recruiting young people.
What about non-levy employers?
Non-levy employers are businesses that do not pay the Apprenticeship Levy. For these organisations, the Government directly funds eligible apprenticeship training through the apprenticeship funding system.
From 1 August 2026, eligible apprentices aged 16 to 24 can have 100% of their apprenticeship training and assessment funded up to the relevant funding band maximum. Non-levy employers may also be able to access the £2,000 hiring payment from 1 October 2026 when recruiting an eligible new apprentice aged 16 to 24.
For smaller employers, this combination of funded training and financial support can make apprenticeships a particularly attractive way to expand a team.
Apprenticeships are about more than funding
While the financial incentives are significant, they should not be the only reason an employer considers an apprenticeship.
The real value of an apprenticeship comes from the person you develop.
Rather than competing for experienced candidates who may already have established ways of working, employers can recruit someone with the right attitude, potential and willingness to learn. They can then develop that individual around the systems, processes, culture and expectations of the organisation.
An apprentice can become a valuable member of the team while developing the skills needed for the role. Over time, they may progress into more senior or specialist positions, creating a stronger internal talent pipeline and reducing the organisation’s reliance on external recruitment.
The financial support simply makes that investment more accessible.
Apprenticeships can support long-term workforce development
Employers should also consider where apprenticeships could help address existing or future skills gaps.
A Business Administrator apprentice can develop the organisation, communication and business process skills needed to support a growing team. A Content Creator apprentice can build digital marketing, copywriting and content production skills. A Sports Coach apprentice can develop coaching, communication and leadership capabilities. A Teaching Assistant apprentice can develop the practical skills required to support pupils and contribute to their learning and development.
By recruiting apprentices into roles that support genuine business needs, employers can develop talent while also increasing their capacity.
This makes apprenticeship recruitment much more than a way to access funding. It becomes a long-term workforce strategy.
Educationwise can help you access apprenticeship funding
Understanding apprenticeship funding can feel complicated, particularly when several incentives have different eligibility requirements and payment arrangements.
At Educationwise, we support employers throughout the apprenticeship recruitment process. Our team can help you understand the funding available, identify suitable apprenticeship programmes and explain which Government incentives may apply to your organisation.
We also offer a completely free recruitment service.
That means you do not have to find your apprentice yourself. We can advertise your vacancy, attract suitable candidates, shortlist applicants and support you through the recruitment process, helping you find someone who is right for both the role and your organisation.
For employers, this removes one of the biggest barriers to apprenticeship recruitment. You can focus on finding the right person while we help with the recruitment process and provide guidance on the funding available.
What could your business access?
There has never been more Government support available for employers looking to recruit young apprentices.
Depending on your circumstances, you may be able to benefit from:
- 100% Government-funded apprenticeship training for eligible apprentices aged 16 to 24, up to the relevant funding band maximum
- Up to £2,000 hiring payment for eligible non-levy employers recruiting a new apprentice aged 16 to 24 from 1 October 2026
- £1,000 employer payment for eligible apprentices aged 16 to 18, or certain apprentices aged 19 to 24
- Up to £2,000 Foundation Apprenticeship incentive for eligible employers
- £3,000 Youth Jobs Grant for eligible young people aged 18 to 24 who have been unemployed and claiming Universal Credit for six months or more
- Employer National Insurance relief for qualifying apprentices under 25
- £3,000 care leaver bursary for eligible care leavers under 25 starting an apprenticeship
Some forms of support can be combined where the relevant eligibility requirements are met.
The exact funding available will depend on the apprentice, the employer and the apprenticeship being delivered, so it is important to check the current Government rules before making a recruitment decision.
Now could be the right time to recruit an apprentice
With fully funded apprenticeship training for eligible 16 to 24-year-olds, new employer hiring payments, Youth Jobs Grants, additional support for eligible young people, Foundation Apprenticeship incentives and National Insurance relief, the financial case for apprenticeship recruitment has become stronger.
But the biggest benefit is still the opportunity to develop people.
An apprentice can bring fresh ideas, enthusiasm and potential into your organisation while gaining the practical skills and experience needed to build a career. For employers, they provide an opportunity to develop talent around the needs of the business and build a stronger workforce for the future.
If you are considering recruiting an apprentice, Educationwise can help you understand the funding available and make the recruitment process straightforward. Our free recruitment service can help you advertise your vacancy, find suitable candidates and shortlist applicants, while our team can guide you through the apprenticeship funding and incentives that may apply.
Get in touch with Educationwise today to find out what apprenticeship funding your business could access and how our free recruitment service can help you recruit your next apprentice.
Government funding, incentives, National Insurance rules and eligibility criteria are subject to change. Please speak to Educationwise for the latest guidance relevant to your organisation.