Financial Incentives
Apprenticeships provide employers with a cost-effective way to develop talent, address skills gaps and invest in the future of their workforce.
Alongside the benefits of increased productivity, improved staff retention and professional development, employers may also be eligible for a range of financial incentives and funding support.
Government Funding.
Apprenticeship training is heavily funded by the Government, making it an affordable option for businesses of all sizes. From 1 August 2026, non-levy employers recruiting apprentices aged 16 to 24 will receive 100% government funding towards apprenticeship training and assessment costs, meaning there is no employer contribution to pay. For apprentices aged 25 and over, employers are required to contribute just 5% towards the cost of training and assessment. Levy-paying employers can use funds from their Digital Apprenticeship Service account to cover apprenticeship training and assessment costs for both new and existing employees.
National Insurance Savings.
Employers do not pay employer National Insurance contributions for apprentices under the age of 25 who earn below the Upper Secondary Threshold.
This can provide significant savings while supporting workforce development and growth.
£1,000 Employer Incentive Payment
Employers can receive a £1,000 government incentive payment when employing an apprentice aged 16 to 18, or an apprentice under the age of 25 who has an Education, Health and Care (EHC) Plan or has previously been in care. This funding is paid directly to the employer and can be used to support a range of business costs associated with employing and developing an apprentice.
Depending on your sector, location and apprenticeship programme, additional grants and incentive payments may be available. Some industries, including childcare, may offer enhanced employer incentives to support recruitment, staff development and skills growth.
Frequently Asked Questions
Non Levy employers can receive fully funded apprenticeship training for apprentices aged 16 to 24, meaning there is no employer contribution towards training costs for this age group. For apprentices aged 25 and over, employers contribute 5% of training costs, while Levy paying employers can use funds from their Apprenticeship Service account.
Yes, employers can receive a £1,000 government payment for eligible apprentices aged 16 to 18 or apprentices under 25 with an Education, Health and Care Plan or care experience. The payment goes directly to the employer and can support costs associated with employing and developing the apprentice.
Employers do not pay Class 1 National Insurance contributions for eligible apprentices under 25 who earn below the relevant earnings threshold. This can reduce the overall cost of employing a younger apprentice and provides an additional saving alongside the government funding available towards eligible apprenticeship training costs.
Additional apprenticeship grants and incentives may be available depending on factors such as your sector, location, apprentice and chosen programme. Professional Training Solutions can help employers understand the funding and incentives they may be eligible for, including any additional support available alongside standard government apprenticeship funding.
Yes, apprenticeship funding can be used to train eligible existing employees as well as people recruited specifically as apprentices. Both Levy and non Levy employers can use apprenticeship programmes to develop their current workforce, helping employees gain recognised skills and qualifications while continuing to work within the organisation.
