In April the new Growth and Skills Levy came into effect, overhauling the existing apprenticeship system. The main aims of the changes are to close skills gaps and help young people enter the job force. To do this, the Department for Education (DfE) have introduced a number of incentives to encourage employers to utilise apprenticeships.
This article breaks down the incentives available to employers and how your can utilise them to support your organisation.
Youth hiring incentives
To encourage business to hire young people the DfE introduced a cash incentive of up to £3,000 is available for hiring young talent aged 16-24 (if on Universal Credit).
SME support
Non-levy paying employers can receive a £2,000 incentive for recruiting new apprentices aged 16–24, starting October 2026, payable after 90 days of employment.
Funding flexibility
Levy-paying employers (annual bill >£3m) can transfer up to 50% of their annual funds to other businesses, and the government provides a 10% top-up to account funds.
National Insurance exemption
The updated levy framework reiterated that employers are not required to pay National Insurance Contributions (NICs) for apprentices under 25.
SME funding
Smaller organizations (non-levy payers) benefit from 95% of training costs of apprenticeships being covered by the government.
Foundation apprenticeships
New, shorter apprenticeships (level 2) are available in sectors like construction, digital, and manufacturing, designed to cover employability skills.
Apprenticeship units
Apprenticeship units are short, focused training modules taken from existing apprenticeship standards. Apprenticeship units concentrate on a single skill area and can be completed in a matter of weeks. Like the full apprenticeship provisions, these are funded through the Growth & Skills Levy, meaning most employers can access them at low or no cost. Apprenticeship units offer a practical, employer‑led way to develop talent.
LMP Education levy and recruitment support
LMP Education is an award-winning apprenticeship provider that offers a range of Growth and Skills levy support for organisations across a variety of sectors. Alongside our levy utilisation strategy support that we offer, we can also support your organisation through recruitment services helping you find the right candidate for your position. All our services are fully funded and at no cost to your organisation.
To learn more about how we can support your organisation, book a free levy audit consultation with the LMP team today!
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