Plan Would Make Firms Pay More to Train Older Apprentices

Ministers are considering an overhaul of apprenticeship funding in England that would make employers pay more to train workers aged 25 and over than younger apprentices. According to The Guardian, the plan would increase the cost of training older workers by 25 per cent. Money from the growth and skills levy would still cover eligible training costs for 16-to-24-year-olds, but for older apprentices it would pay only 75 per cent and employers would meet the rest.

The proposal is part of a response to a long decline in youth apprenticeship starts. The Guardian says those starts have fallen 40 per cent over a decade, with under-19 enrolments nearly halved. More than half of new starts are now for people over 25. The number of young people not in education, employment or training has risen to almost one million.

Under the existing system, large employers with an annual pay bill above £3m pay 0.5 per cent of that bill into a digital account. The £4bn-a-year levy can be drawn on for training and assessment costs. Employers have for years been told they could use those funds as they saw fit. The proposed co-investment rule would change that for older apprentices. A phased launch is under consideration for September 2027.

The Guardian quoted a senior policy expert close to the government as saying: “Employers are not going to like it” The expert added that employers had been told the levy was their money and they could decide. The Department for Work and Pensions said it was determined to address the decline in youth starts and pointed to 50,000 additional apprenticeships for young people and a £2,000 hiring payment for small employers taking on a 16-to-24-year-old apprentice.

The wider skills strategy is under pressure. The foundation apprenticeship scheme enrolled 160 young people in its first eight months, against an ambition for 30,000 starts over the parliament. The Fabian Society has called for the levy rate to rise to 0.7 per cent to raise an extra £2.5bn targeted at youth apprenticeships, but ministers are reportedly wary of adding business costs after the backlash over employer national insurance contributions.

The review into youth unemployment has not yet reported. The proposal sits inside a constrained public spending environment. It does not create new training places; it redirects existing levy money toward a younger age group by making older apprentices more expensive for employers. That is a funding lever, not a training plan.