Over the last few months, the UK government has made several changes and announcements that will impact the apprenticeship market and the employers who use an apprenticeship scheme to employ or upskill staff. To help you get up to speed with all that was announced we will be recapping the most recent announcements that were made in 2024 so you are ready to move to 2025 with a full understanding of what’s to come.

Apprenticeships reform

In September 2024 the UK government has announced their plans for reforming the current apprenticeship process. This included the introduction of the Growth Skills Fund that is set to replace the current apprenticeship levy. 

The aim of this reform is to encourage young people to join the work force in critical sectors, helping to close the skills gap. The new fund will have some key differences including allowing for shorter apprenticeships, giving employers more flexibility over their training.

To support with the funding of this new scheme, employers will need to rebalance their funding for apprenticeship, investing in younger workers. Alongside this, employers can no longer fund level 7 apprenticeships (equivalent to a master’s degree and often accessed by older or already well qualified employees) using the levy.

The full scope of the new Growth and Skills fund and how to access it is still to be announced. If you are interested in making use of your existing Levy funds, please book a discovery call with the LMP team.

Autumn Budget

In October the new Autumn Budget was presented in parliament. The budget has set out a number of relevant factors for employers when it comes to apprenticeships.

Apprenticeships minimum wage

The minimum wage for apprentices was raised from £6.40 per hour to £7.55 per hour which will come into effect in April 2025.

National insurance

The autumn budget announced an increase on employer national insurance contribution from 13.8% to 15% but reiterated that employers do not need to pay national insurance for apprentices under the age of 25.

Foundation apprenticeships

The UK Government will be investing £40 million into new foundation apprenticeships, a small percentage of the £7.2 billion for apprenticeship programmes. Some are concerned that this is not enough money for apprenticeships and skills development but on the other hand foundation apprenticeships should be helpful and encourage young people to receive crucial skills and help close the skills gap.

Funding for further education

£300 million were set aside for further education. As of now it was not yet announced how this fund will be used but it’s believed to be aiming at supporting 16 to 19-year olds.

While many of the recent announcements still need further information and clarification, one thing is clear: the UK government is putting a focus on training for young people and closing the skills gap. LMP Education will continue to report on the most recent announcements as more information comes.

If you would like to discuss how your business can use apprenticeships to hire or upskill your team, please book a discovery call with the LMP team.