Apprenticeship Incentives and Funding

From August 2026, eligible non-levy paying employers will receive 100% government funding towards apprenticeship training and assessment costs when recruiting apprentices aged under 25.

This removes the employer co-investment previously required for many apprentices, making apprenticeships an even more cost-effective way to recruit and develop skilled employees.

Employers can also continue to receive a £1,000 incentive payment when recruiting:

• An apprentice aged 16–18.
• An apprentice aged 19–24 with an Education, Health and Care Plan (EHCP).
• A care-experienced apprentice aged 19–24.

From October 2026, eligible non-levy paying employers can claim a £2,000 cash incentive when recruiting an apprentice aged 16 to 24.

• You must be a non-levy paying employer.
• The apprentice must be aged 16–24.
• Applies to apprentices starting their apprenticeship from 1 October 2026.
• The apprentice must be a new hire, and their employment start date must be within the past 90 days from the apprenticeship training start date.
• The payment will be issued in two instalments, and employers will be eligible for the first payment once the apprentices has completed the first 90 days of their apprenticeship, the second payment will be made after 365 days.
• The apprentice is included in your PAYE scheme added to your apprenticeship service account, eligibility is determined by the DfE and HRMC.
• The payment can be claimed alongside fully funded training where applicable.

For many small and medium-sized businesses, these measures provide a significant opportunity to reduce recruitment and training costs.

By combining:

• 100% funded apprenticeship training
• The existing £1,000 employer incentive
• The new £2,000 SME hiring incentive

Eligible employers can access substantial financial support while addressing skills shortages, developing future talent and strengthening their workforce.