Apprenticeships Funding Options

Building on the apprenticeship levy, the Growth and Skills Levy offers a more flexible approach for employers and learners. 

If you're an employer who doesn't pay the apprenticeship levy, or if you're a levy-paying employer but don't have enough funds, you'll need to pay 5% of the training and assessment costs for your apprentice. The government will fully fund the apprenticeship training costs. For apprentices who at the start of their apprenticeship training are aged between:

• 16 and 21 years old (or 15 years of age if the apprentice’s 16th birthday is between the last Friday of June and 31 August)
• 22 and 24 years old and has either an education, health and care (EHC) plan provided by their local authority and/or has been in the care of their local authority and their employer has fewer than 50 employees

If you are not a Levy payer and employ a 16-18-year-old, you can also claim a £1,000 incentive payment from the Government (This also applies to 19-24-year-olds who have previously been in care or have a local authority education, health and care plan).

If you want to know more about the Growth and Skills Levy and how it affects your business, click here or download our guide here

Employers may not need to pay Class 1 National Insurance contributions for an apprentice if the apprentice is:

• under 25 years old
• on an approved UK government apprenticeship standard 
• earns less than £967 a week (£50,270 a year)

The apprentice, as an employee, will continue to pay Class 1 insurance contributions through their salary, this will only benefit the employer.

Recognising the value that apprentices bring to the economy, the Government’s Plan for Jobs includes updates to the apprenticeship funding policy, with incentive payments for employers who hire new apprentices.

Provided the eligibility criteria are met, there will be no limit on the number of incentive payments you can claim.

The payment is based on the age of the apprentice:

• £1,000 if your apprentice is aged 16-18 the payment will be made directly to you in two equal instalments, where the apprentice is still in learning at day 90 and day 365.