How Government Incentives Are Driving Youth Hiring and Apprenticeship

1. £2,000 Incentive for SMEs Hiring Apprentices

From October 2026, non-levy paying employers, typically small and medium-sized businesses, will be eligible to receive £2,000 for each apprentice aged 16–24 that they recruit.

To qualify, the apprentice must have started employment within the previous three months.

This incentive sits alongside existing support available for younger apprentices, including:

• £1,000 additional payment for employers hiring apprentices who are:

  • Aged 16 to 18

  • Aged 19 to 24 with an Education, Health and Care (EHC) plan

  • Aged 19 to 24 and have been in care

  
  

Employers can use this funding flexibly to support costs such as salary, travel or equipment.

2. No Employer National Insurance for Apprentices under 25

Employers will continue to benefit from no employer National Insurance contributions for apprentices under the age of 25.

This remains one of the most significant cost-saving measures available, particularly for organisations looking to recruit early-career talent.

3. £3,000 Youth Jobs Grant for Employers

Employers may also be eligible for a £3,000 Youth Jobs Grant when hiring young people who meet the following criteria:

• Aged between 18 and 24

• Have been claiming Universal Credit and actively seeking work for at least six months

Further details on how and when this funding can be accessed are expected to be confirmed.

Additional Updates from the Government Announcement

Alongside financial incentives, the announcement included several important changes to apprenticeship delivery and funding.

Apprenticeship Units

Apprenticeship Units will be introduced as part of the evolving Growth & Skills Levy.

These are shorter, modular training programmes designed for employees aged 19 and over who are already in work and need to develop specific skills.

They are not intended for individuals looking to change careers, but rather to support targeted upskilling within existing roles.

From April 2026, Apprenticeship Units will be available in areas including:

• AI leadership

• Electric vehicle charging installation and maintenance

• Electrical fitting and assembly

• Mechanical fitting and assembly

• Modular building assembly

• Solar PV installation and maintenance

• Welding (mechanised)

These units are based on existing apprenticeship standards and are designed to provide a more flexible approach to skills development.

Streamlining of Apprenticeship Standards

As part of wider reform, 16 apprenticeship standards will be defunded from August 2026, meaning no new learners can start on these programmes.

However, apprentices already enrolled will be able to complete their training.

This reflects a broader move towards aligning apprenticeship provision with priority skills and labour market needs.

What This Means for Employers

These changes signal a clear shift in how employers can approach recruitment and workforce development.

With increased financial support and more flexible training options, there is a strong opportunity to:

• Reduce recruitment costs

• Access government funding

• Develop skills aligned to business needs

• Build a sustainable talent pipeline

Employers who act early will be best placed to take advantage of these incentives.

Final Thoughts

Government incentives are making it more accessible than ever to hire and develop young talent.

However, making the most of these opportunities requires a clear understanding of funding, eligibility and the right training approach.

At Momentous Learning, we work with employers to turn funding and incentives into practical workforce solutions, supporting both recruitment and long-term development.

Talk to our team to explore how these incentives could work for your organisation.