New apprenticeship funding support: what employers need to know

Apprenticeships have long been a practical way for businesses to bring in new talent, develop valuable skills and build a stronger workforce.

New government funding changes are now set to make that opportunity even more accessible, particularly for employers looking to recruit young people under the age of 25.

The changes include fully funded apprenticeship training for eligible under-25s, alongside a new bursary designed to support young people from lower-income households.

Here is what the changes mean and why they could matter to your organisation.

Apprenticeship training for under-25s will be fully funded

From 1 August 2026, apprenticeship training will be fully funded for eligible apprentices under the age of 25.

For levy-paying employers, this is particularly important if their apprenticeship levy funds have already been used. Under the new arrangements, employers will not need to make a co-investment contribution towards the training costs of an eligible apprentice under 25.

In simple terms, this removes another potential cost barrier for businesses considering recruiting a younger apprentice.

It could make apprenticeships an even more attractive option for employers that want to:

• Recruit into entry-level or hard-to-fill roles

• Build a pipeline of future talent

• Develop skills around the needs of the business

• Support succession planning

• Create career opportunities within their local communities

For employers already thinking about future recruitment, the changes provide a good opportunity to review where an apprentice could add value.

A new bursary to support young apprentices

The Government has also announced a new apprenticeship bursary worth up to £4,500 per year, per household.

The bursary is intended to support a small number of Universal Credit households that could otherwise become financially worse off when a young person starts an apprenticeship.

Although apprentices earn a wage, the change in household circumstances can sometimes lead to a reduction in benefits. In certain cases, this can leave a family with less money overall and make it more difficult for a young person to accept an apprenticeship opportunity.

The new bursary is designed to help reduce that pressure.

This is an important step because a young person’s ability to begin an apprenticeship should not depend on whether their household can afford the short-term financial impact.

The final value of the bursary, the full eligibility criteria and details of how families can apply will be confirmed by the Government in due course.

Further support for smaller employers

Smaller businesses will also be able to access additional support when recruiting younger apprentices.

From October 2026, eligible smaller employers recruiting an apprentice under the age of 25 will receive a £2,000 hiring bonus.

Alongside fully funded training and existing National Insurance contribution relief for eligible apprentices under 25, the overall support available could significantly reduce the cost of bringing a young person into the business.

For SMEs that may previously have viewed apprenticeships as too costly or complicated, these changes could make recruitment much more achievable.

Why this matters for employers

The benefits of apprenticeships go beyond financial support.

A well-planned apprenticeship can help a business develop employees with the right skills, behaviours and knowledge from the beginning of their career.

Apprentices can grow into the needs of the organisation, bring new ideas into the workplace and become valuable long-term members of the team.

They can also help businesses respond to skills gaps and reduce their reliance on recruiting people who already have every skill or qualification required.

The latest funding changes make it easier for employers to focus on the value an apprentice could bring, rather than being held back by the cost of training.

Now is a good time to start planning

Even if you are not ready to recruit immediately, it is worth beginning the conversation now.

Think about the areas of your organisation where skills are difficult to find, where teams need additional support or where you want to develop future talent.

An apprenticeship programme can then be built around a genuine business need, rather than simply filling a vacancy.

Workpays supports employers throughout the process, from choosing the right apprenticeship and understanding the funding available to recruiting the right person and supporting them throughout their programme.

To find out how the new changes could benefit your organisation, click the button below to speak to our apprenticeship team.

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