New financial incentives for apprenticeships are set to make it more attractive for businesses to take on apprentices.
With many organisations facing challenges when it comes to the recruitment and retention of talent, the UK Government has announced a wave of new and expanded financial incentives to support businesses to take on apprentices.
Not only can apprenticeships offer long term benefits such as molding staff to meet business needs, bringing in fresh ideas and culture into the business and increased retention rates, the new financial incentives strengthen the business case even more.
National incentives now mean that SME businesses could access:
- £2,000 for taking on an apprentice aged 16-24
- £1,000 for hiring an apprentice aged between 16-18 or 19-24 but with an Education Health Care Plan/Care leaver
- £3,000 for hiring an apprentice aged 18-24 who has been on Universal Credit for 6+ months
- £2,000 for hiring an foundation apprentice aged 16-21 or 22-24 but with an Education Health Care Plan/Care leaver
As an example, an SME business could hire an 18 year old apprentice who has been on Universal Credit for 6 months prior and receive £5,000 or £7,000 if on a foundation apprenticeship.
For Worcestershire businesses, it gets even better as these national incentives can also be stacked with local incentives, which are available in certain district areas, to make the financial benefits even greater.
Malvern Hills and Wychavon based businesses can access £1,500 of local grant funding for taking on an apprentice if they haven’t done so in the previous 12 months.
So when adding this into the national incentives, the same SME business if they were located in Wychavon and hadn’t hired an apprentice in the last 12 months, would receive £6,500 or £8,500 if on a foundation apprenticeship.
It is not just the new grants as well. For SME businesses, the Government also now covers 100% of training and assessment costs for eligible apprentices aged under 25, removing the previous co-investment requirements. Whether a business is looking at a Level 2 administration course or a Level 6 degree-level software engineering apprenticeship, the Government pays the training provider directly, meaning zero training fees for SME businesses.
Building upon this, the financial perks don’t stop at grants and training subsidies. Employers also do not have to pay Class 1 Employer National Insurance Contributions (NICs) for any apprentice under the age of 25 who earns up to the upper earnings limit (£50,270 per annum).
As a summary:
- UK Government grants mean that businesses could access up to £8,000 for taking on an apprentice. Eligibility criteria applies.
- Businesses in Malvern and Wychavon could also stack the national incentives with an additional local grant of £1,500. Eligibility criteria applies.
- SME businesses DO NOT have to cover the training costs for apprentices under 25.
- SME businesses DO NOT have to pay Class 1 National Insurance Contributions for apprentices under 25 and earning less than £50,270 per annum.
If you’re an employer considering taking on an apprentice in 2026, the financial support available has never been stronger.
