Apprenticeship funding changes remove another barrier for employers hiring young talent

From 1 August, a significant change to apprenticeship funding came into effect, making it easier and more affordable for employers to invest in young people.

The changes are another clear signal that the UK Government is looking to remove barriers that prevent employers from recruiting and developing early careers talent.

Under the new rules, apprenticeship training and assessment for eligible 16 to 24-year-olds is now fully funded up to the relevant funding band maximum.

For non-levy employers, this means there is no employer co-investment required for eligible apprentices aged 16 to 24. Previously, many smaller employers were expected to contribute towards training costs.

For levy-paying employers, levy funds will still be used first. However, if an employer has insufficient funds remaining in its apprenticeship account, the Government will now fully fund eligible training and assessment costs for apprentices aged 16 to 24, removing the need for employer co-investment in these cases.

Employers remain responsible for paying apprentices' wages and for any training costs above the relevant funding band maximum.

Why this matters

For many organisations, particularly SMEs, the cost of recruiting and developing young talent has been one of several factors limiting apprenticeship recruitment.

These funding changes reduce that financial barrier and arrive at a time when many sectors continue to report skills shortages and an ageing workforce.

The announcement also sits alongside a wider package of government measures aimed at increasing youth employment, including plans for a £2,000 apprenticeship hiring payment for eligible non-levy employers from October 2026 and a wider ambition to create 50,000 additional apprenticeship starts for young people.

The opportunity for employers

For employers already considering expanding their early careers strategy, this is an ideal opportunity to review workforce plans.

Apprenticeships can help organisations:

• Build talent pipelines for hard-to-fill roles.

• Develop skills aligned to future business needs.

• Improve retention through structured career development.

• Increase workforce diversity by widening access to careers.

• Reduce long-term recruitment costs by growing talent internally.

While the funding changes make apprenticeships more financially attractive, success still depends on attracting the right candidates. Many employers continue to face challenges because young people simply aren't aware of the breadth of careers available across many sectors.

This is particularly true in industries such as financial services, insurance, pensions, risk, technology and professional services, where exciting career opportunities often remain hidden from school and college leavers.

Kate Earle-Davis, CEO of Acrobat Talent, said:

"This is a really positive step for employers looking to invest in early careers talent while creating more opportunities for young people to start their careers and build valuable skills.

Reducing the financial barriers is welcome, but awareness remains one of the biggest challenges. Many young people still don't know these careers exist or don't realise apprenticeships can provide an excellent route into them.

Employers who combine these funding opportunities with strong attraction strategies, meaningful employer branding and engagement with schools and colleges will be in the strongest position to build the talent pipelines they need for the future."

Looking beyond funding

Funding is only one piece of the puzzle.

As organisations compete for emerging talent, employers that clearly communicate career pathways, showcase real employee stories and engage young people early are likely to see the greatest return on investment.

The latest apprenticeship reforms provide another welcome incentive to recruit young people. The challenge, and opportunity, now lies in ensuring those young people know the opportunities exist.

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