What funding is available for young apprentices?
Employers recruiting younger apprentices can benefit from significant Government support towards the cost of apprenticeship training.
For eligible apprentices aged 16–24, employers do not need to make a contribution towards training costs. The way that funding works depends on whether your organisation pays the Apprenticeship Levy:
- Non-levy employers: the Government funds 100% of eligible apprenticeship training costs.
- Levy-paying employers: training costs are paid from your available levy funds. If those funds are exhausted, the Government funds 100% of the remaining eligible training costs, with no employer co-investment required.
Employers recruiting eligible younger apprentices may also be able to access additional financial support. For eligible 16–18-year-olds, this can total up to £3,000.
This makes apprenticeships an increasingly cost-effective way to recruit new talent, develop the skills your organisation needs and create opportunities for young people entering the workforce.
What does 100% funded apprenticeship training mean?
Fully funded apprenticeship training means an eligible employer does not have to make a contribution towards the cost of the apprentice’s training.
For non-levy employers recruiting an eligible apprentice aged 16–24, the Government covers 100% of the eligible training costs.
The position is slightly different for employers that pay the Apprenticeship Levy. While levy funds are available, the cost of training continues to be taken from the employer’s Apprenticeship Service account. If those funds are exhausted, the Government covers the eligible training costs for apprentices aged 16–24 rather than asking the employer to make a co-investment payment.
This distinction is important. Fully funded training doesn’t mean there is no cost to employing an apprentice. Employers remain responsible for the apprentice’s salary and other normal employment costs.
What grants are available when employing a young apprentice?
Alongside fully funded apprenticeship training, employers may also be able to receive financial incentives when they recruit a younger apprentice.
There are two employer incentives to be aware of: the existing £1,000 employer incentive and a new £2,000 employer incentive for non-levy businesses.
The amount your business can receive depends on the age of the apprentice and whether you pay the Apprenticeship Levy.
£1,000 employer incentive for recruiting a 16–18-year-old apprentice
Both levy and non-levy employers can receive a £1,000 incentive when they recruit an apprentice aged 16–18.
This is an existing employer incentive and continues alongside the new apprenticeship funding arrangements.
The £1,000 is separate from apprenticeship training funding. This means an employer recruiting a 16–18-year-old can benefit from fully funded training as well as receiving the £1,000 payment.
£2,000 incentive for non-levy employers recruiting a 16–24-year-old apprentice
From October 2026 inductions, non-levy employers can receive a new £2,000 incentive for recruiting an apprentice aged 16–24.
This creates an additional financial benefit for smaller employers that don’t pay the Apprenticeship Levy and are looking to bring younger people into their workforce.
The apprentice’s eligibility for the incentive is based on their age at induction, rather than their age when they are placed with the employer.
When does a new apprentice need to start?
To qualify for the new £2,000 incentive, the apprentice must be a new employee and must be inducted onto their apprenticeship within 90 days of starting employment.
They cannot have been on the employer’s payroll before their qualifying employment start date. Eligibility will be checked against HMRC records, so an existing employee cannot be treated as a new recruit simply by starting their apprenticeship after the incentive becomes available.
For the first eligible October 2026 inductions, apprentices employed from 1 July 2026 can qualify provided they are inducted within the required timeframe. For example, someone starting employment on 1 July would need to be inducted by 1 October.
The important distinction is that eligibility is based on both the employment start date and apprenticeship induction date. Simply being aged 16–24 at induction isn’t enough to qualify for the £2,000 incentive.
How can employers receive up to £3,000?
A non-levy employer recruiting a 16–18-year-old apprentice could potentially benefit from both employer incentives:
| Employer support | Amount |
| Existing 16–18 employer incentive | £1,000 |
| New 16–24 non-levy employer incentive | £2,000 |
| Total employer incentives | Up to £3,000 |
This is in addition to the apprentice’s training costs being fully funded.
For a qualifying non-levy employer recruiting a 16–18-year-old, this therefore means no employer contribution towards apprenticeship training costs and up to £3,000 in employer incentives.
What funding is available for apprentices aged 19–24?
The £1,000 and £2,000 incentives have different age criteria, so it’s important not to assume every apprentice aged 16–24 attracts the full £3,000.
For a non-levy employer recruiting a 19–24-year-old, the new £2,000 employer incentive can apply. Their apprenticeship training is also fully funded.
The existing £1,000 incentive described in our funding guidance applies to apprentices aged 16–18, so it wouldn’t ordinarily form part of the support available when recruiting someone aged 19–24.
What about levy-paying employers?
The new £2,000 incentive is specifically available to non-levy employers.
Levy-paying employers can continue to receive the existing £1,000 incentive when recruiting a 16–18-year-old apprentice, but they don’t qualify for the new £2,000 non-levy incentive.
Training for apprentices aged 16–24 is still fully funded under the new arrangements. For levy employers, training costs are taken from available levy funds first. If those funds are exhausted, the Government covers the training costs and the employer isn’t invoiced for co-investment.
When are apprenticeship incentive payments made?
Employer incentives aren’t paid as a single upfront payment.
For both the £1,000 and £2,000 incentives, payments are made in two stages based on how long the apprentice remains in learning:
- The first payment becomes due after the apprentice has been in learning for 90 days and is paid the following month – typically month four.
- The second payment becomes due after 365 days in learning and is paid the following month – typically month 13.
If the apprentice leaves their apprenticeship early, future incentive payments stop. Eligibility is based on the apprentice’s last day in learning, rather than their final day of employment.
Employers should therefore treat the incentive as staged financial support rather than an upfront payment when calculating the initial cost of recruiting an apprentice.
Apprenticeship grants and training funding aren’t the same thing
It’s useful to separate the two types of financial support.
Apprenticeship training funding pays for the cost of delivering the apprenticeship. For apprentices aged 16–24, employers don’t make a co-investment contribution towards these training costs.
Employer incentives are additional payments available when an employer recruits an apprentice who meets the relevant criteria.
So, for example, a non-levy employer recruiting a qualifying 18-year-old could benefit from:
- 100% funded apprenticeship training
- £1,000 existing employer incentive
- £2,000 new employer incentive
- Up to £3,000 in total employer incentives
The employer would still be responsible for the apprentice’s salary and normal employment costs.
What if I recruit an apprentice aged 25 or over?
Apprenticeships aren’t restricted to younger people, and employers can still receive significant Government support when developing someone aged 25 or over.
How much you contribute depends on whether your organisation pays the Apprenticeship Levy.
Non-levy employers
If your organisation doesn’t pay the Apprenticeship Levy, you’ll normally contribute 5% of the eligible training cost for an apprentice aged 25 or over.
The Government funds the remaining 95%.
Levy-paying employers
If you pay the Apprenticeship Levy and have sufficient funds available, training costs are paid from your levy account.
If your levy funds are exhausted and the apprentice is aged 25 or over, you’ll contribute 25% of the training costs, with the Government funding the remaining 75%.
So while the most generous funding is available for eligible apprentices aged 16–24, substantial Government support remains available for older apprentices too.
Will I have to contribute towards apprenticeship training?
A simple way to understand the new funding rules is to start with the apprentice’s age.
Recruiting an eligible apprentice aged 16–24?
You won’t make a co-investment contribution towards their eligible apprenticeship training.
If you’re a non-levy employer, the Government funds the training.
If you’re a levy-paying employer, the cost comes from your levy funds while they’re available. If those funds run out, the Government funds the remaining eligible training costs.
Recruiting an apprentice aged 25 or over?
Co-investment may apply.
If you’re a non-levy employer, you’ll normally contribute 5%, with the Government funding 95%.
If you’re a levy-paying employer with exhausted levy funds, you’ll contribute 25%, with the Government funding 75%.
If you’re a levy employer with sufficient funds available, training continues to be paid from your levy account.
Why recruit a young apprentice?
The enhanced funding makes recruiting younger apprentices financially attractive, but cost shouldn’t be the only consideration.
Apprenticeships allow employers to recruit people at the beginning of their careers and develop their skills around genuine business requirements.
For employers, this can help to:
- Build a future talent pipeline by developing people early in their careers.
- Address skills gaps by training apprentices in the skills your organisation actually needs.
- Develop role-specific skills while the apprentice gains practical workplace experience.
- Support succession planning by creating progression routes into more advanced roles.
- Widen access to your organisation by creating opportunities for people beginning their careers.
The funding available reduces the financial barrier to doing this, giving employers an opportunity to invest in longer-term workforce development while keeping training costs low.
Make the most of apprenticeship funding
With fully funded training available for eligible 16–24-year-olds and additional financial support available in some circumstances, recruiting a young apprentice can be a cost-effective way to bring new skills into your organisation.
The funding available will depend on your organisation, the apprentice you recruit and whether you pay the Apprenticeship Levy. Understanding those details before you recruit can help you plan accurately and make the most of the support available.
At Baltic Apprenticeships, we can help you understand your funding options, find the right apprentice for your business and support you throughout their training.
Ready to recruit your next apprentice? Get in touch with our team to find out what funding your business could access.
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