New £2,000 payment for smaller employers hiring young apprentices
New £2,000 payment for smaller employers hiring young apprentices
Plus every incentive available for young apprentices, how they stack, and who pays what under the 2026/27 rules.
From 1 October 2026, employers who don’t pay the levy can receive up to £2,000 when they take on a new apprentice aged 16 to 24.
It’s the latest in a series of funding changes introduced this year as the Apprenticeship Levy becomes the Growth and Skills Levy. There are now several payments available for employers taking on young apprentices, and most of them can be combined. If you’re hiring more than one 16 to 24-year-old, it really adds up.
New from 1 October: the apprenticeship hiring payment
Up to £2,000
per eligible apprentice, for non-levy employers
Who qualifies: employers who don’t pay the levy, taking on an apprentice aged 16 to 24 whose apprenticeship starts on or after 1 October 2026.
New recruits only: the apprentice must have started working for you no more than 90 days before their training begins.
How it’s paid: £1,000 after 90 days and £1,000 after 365 days in learning (or 242 days for shorter apprenticeships). The first payments are expected from January 2027.
No application needed: eligibility is checked automatically and the payment comes to you through your training provider.
One thing to do now: check that your PAYE scheme is correctly linked in your apprenticeship service account. Eligibility is confirmed through HMRC employment records, so incorrect details could hold up your payment.
Every incentive for young apprentices
These are the payments and savings available to employers in England for apprenticeships starting from 1 August 2026. Training is fully funded for every apprentice aged 16 to 24, and on top of that:
£1,000
Additional payment
For apprentices aged 16 to 18, or 19 to 24 with an education, health and care plan or care experience. Paid as £500 after 90 days and £500 after a year, through us.
£2,000
Hiring payment
For non-levy employers recruiting a new apprentice aged 16 to 24, starting from 1 October 2026. Paid as £1,000 after 90 days and £1,000 after a year, through us.
£3,000
Youth Jobs Grant
For hiring someone aged 18 to 24 who has been on Universal Credit for six months or more, through a vacancy registered with DWP, for at least 25 hours a week. Paid by DWP: £1,800 after 6 weeks and £1,200 after 18 weeks.
0% NI
Employer National Insurance
No employer National Insurance for apprentices under 25 on earnings up to £50,270. A saving on every payroll, applied using NI category letter H.
Apprentices can also receive support directly, including a £3,000 bursary for care leavers and young people in care under 25. These go to the apprentice, so they never reduce what you receive.
How they add up
The employer payments can be combined. DWP’s guidance confirms the Youth Jobs Grant can be claimed alongside the hiring payment and the £1,000 additional payment. The only exclusion is the hiring payment, which levy payers can’t receive. Here’s what that means per apprentice on a BPIF Training apprenticeship:
| Apprentice | Non-levy employer | Levy payer |
|---|---|---|
| Aged 16 to 18, new recruit | £3,000 | £1,000 |
| Aged 16 to 18, existing employee | £1,000 | £1,000 |
| Aged 18, recruited through the Youth Jobs Grant | £6,000 | £4,000 |
| Aged 19 to 24, new recruit | £2,000 | – |
| Aged 19 to 24, new recruit with an EHC plan or care experience | £3,000 | £1,000 |
| Aged 19 to 24, recruited through the Youth Jobs Grant | £5,000 | £3,000 |
| Aged 19 to 24, Youth Jobs Grant recruit with an EHC plan or care experience | £6,000 | £4,000 |
“Existing employee” means someone who joined more than 90 days before their training started. Figures are cash payments to the employer and don’t include fully funded training or National Insurance savings.
Up to £6,000 per apprentice. On top of these payments, every apprentice under 25 has fully funded training, and each one saves you around £1,100 a year in employer National Insurance (based on 30 hours a week at the apprentice minimum wage).
Instalment payments depend on the apprentice still being employed and in learning on each due date. The Youth Jobs Grant works differently: DWP pays it based on employment and earnings records, and won’t reclaim the first payment if the person later leaves.
Who pays what in 2026/27
The 2026/27 funding rules apply to apprenticeships starting between 1 August 2026 and 31 July 2027. The headline: apprentices aged 16 to 24 are now fully funded at every employer, and non-levy employers training staff aged 25 and over still have 95% of costs covered.
| Employer and apprentice age at start | Government pays | Employer pays |
|---|---|---|
| Non-levy employer Apprentice aged 16 to 24 |
100% | 0% |
| Non-levy employer Apprentice aged 25+ |
95% | 5% |
| Levy payer, funds used up Apprentice aged 16 to 24 |
100% | 0% |
| Levy payer, funds used up Apprentice aged 25+ |
75% | 25% |
Percentages apply to training and assessment costs, up to the funding band maximum for each apprenticeship. Levy payers with funds in their account continue to use those funds first.
Other changes for levy payers and leadership training
Levy funds
The 10% government top-up has ended, and levy funds entering accounts from August 2026 now expire after 12 months instead of 24.
Leadership apprenticeships
Government funding has been withdrawn for new starts on some standards, including Team Leader (Level 3) and Operations Manager (Level 5). Level 7 funding is now limited to apprentices aged 16 to 21.
Apprentices already on these programmes are not affected and will be funded through to completion. If you’re looking to develop supervisors and managers, we can also offer employer-funded management qualifications. Get in touch and we’ll talk you through the options.
Not sure what applies to you? What you can receive depends on your levy status, the apprentice’s age and circumstances, and how you recruit. We can check what you’re eligible for, help you claim it, and work out what your business will pay before you commit.
Thinking about taking on an apprentice?
Talk to us about funding and the right apprenticeship for your business.
Information correct at 2 October 2026, based on the 2026/27 apprenticeship funding rules and government guidance. Funding rules can change; contact us for the latest position.