UK Plans Higher Training Costs for Older Apprentices to Boost Youth Hiring
Ministers propose requiring employers in England to pay 25% of training costs for workers over 25 to reverse a steep decline in youth apprenticeships.
At a glance
- England plans to make firms cover 25% of training costs for apprentices over 25 while keeping full funding for workers aged 16 to 24.
- The policy aims to reverse a 40% drop in youth apprenticeship starts over the past decade as youth unemployment rises.
- The new co-investment requirement is being considered for a phased launch starting in September 2027.
Ministers in England are drawing up plans to force employers to pay 25% of the training costs for apprentices aged over 25, in an effort to encourage businesses to hire younger workers, The Guardian reported.
Under the proposal, the £4bn-a-year growth and skills levy would continue to fully fund eligible training costs for apprentices aged 16 to 24. However, for workers aged 25 and older, levy funding would cover only 75% of the costs, requiring employers to co-invest the remaining 25%. The policy change is under consideration for a phased rollout beginning in September 2027.
Reversing the Youth Jobs Slump
The government initiative is designed to address a 40% decline in youth apprenticeship starts over the past decade. Over that same period, enrolments among workers under 19 have fallen by roughly half, while workers over 25 now account for more than half of all new starts. Meanwhile, the count of young people not in education, employment, or training has approached 1 million.
The reform is being developed as part of the administration's response to an inquiry by former Labour cabinet minister Alan Milburn into youth joblessness. Chancellor John Healey is preparing to incorporate youth employment measures into an upcoming Commons financial statement.
Employer Pushback and Levy Rules
The proposed restriction on levy funds represents a contentious change for businesses. Under current rules, companies with annual pay bills exceeding £3m contribute 0.5% of their payroll to a digital pot, which they have long been permitted to direct toward training as they see fit. Ministers face pressure over skills delivery, as official data shows Labour's flagship foundation apprenticeship program enrolled just 160 young people in its opening eight months, far short of a 30,000-person parliamentary ambition.
A Department for Work and Pensions spokesperson said the government is determined to address the drop in youth apprenticeships, noting existing initiatives including 50,000 new youth positions and a £2,000 incentive payment for small and medium-sized employers hiring apprentices aged 16 to 24.
Source: The Guardian.
Questions and answers
- Why is the UK government proposing higher costs for older apprentices?
- Ministers want to incentivize businesses to recruit younger workers after youth apprenticeship starts fell by 40% over the last decade, with over-25s now making up more than half of all new starts.
- How would the apprenticeship levy rules change for employers?
- Levy funds would continue covering 100% of training costs for apprentices aged 16 to 24, but would cover only 75% for workers aged 25 and older, leaving employers to fund the remaining 25%.
- When would the new apprenticeship funding rule take effect?
- The government is considering introducing the co-investment rule on a phased timeline beginning in September 2027.
