Non-levy incentive for hiring a young apprentice
EmployerWe’re launching a new incentive of up to £2,000 for non-levy paying employers (typically SMEs) that take on 16–24-year-old apprentices as new employees.
The policy will take effect for those starting apprenticeships from 1 October 2026, as long as they have joined their employer within the past 3 months (ie from July 2026).
This forms part of the Government’s wider reforms aimed at reversing the decline in young apprenticeship starts, creating 50,000 more apprenticeships for young people, and expanding the Youth Guarantee.
SMEs employ large numbers of young apprentices, and these incentives are intended to help meet the additional costs associated with employing young people.
Financial support for hiring a young person
Hiring young talent brings fresh ideas and strengthens an employer’s workforce, enabling them to develop the skills needed to meet the demands of the future.
| Payment | Age eligibility | Schedule |
| £1,000 additional payment for hiring apprentices | 16 to 18 (19 to 24 with EHCP or care leavers) | We pay this in two equal instalments, at day 90 and one year after apprenticeship started (or day 242 if apprenticeship under 12 months). |
| £2,000 foundation apprenticeship incentive | 16 to 21 (22 to 24 for apprentices with an EHCP, care leavers, or prisoners and prison leavers) | We pay this in three equal instalments, at day 90, day 242 (8 months) and the final payment when an apprentice progresses onto their next apprenticeship. |
| £2,000 new SME hiring incentive (from October 2026) | 16 to 24 | We pay this in two equal instalments at day 90 and day 365 (or day 242 if apprenticeship under 12 months). |
| £3,000 new Universal Credit hiring incentive (June 2026) | 18 to 24, if apprentice has been on universal credit for over 6 months | We pay this into two instalments of roughly equal amounts at month 1 and month 3 (to be confirmed) |
| The Universal Credit hiring incentive is paid directly to employers by the Department for Work and Pensions. For the other incentives and payments above, the apprenticeship training provider claims them on behalf of the employer and then passes them on. . | ||
Additional Benefits for Taking on a Young Person
- Once available, employers will be able to receive this new incentive in addition to existing payments and incentives. These include:
- No employer National Insurance contributions for apprentices under 25
- 100% training costs covered for eligible under-25s (non-levy)
- £1,000 payment for each eligible apprentice under-25
- £2,000 employer payment for foundation apprentice
- £3,000 bursary available to care leavers under 25 starting an apprenticeship
More information will be published in due course.
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