England Considers Higher Apprenticeship Training Costs for Employers Hiring Older Workers
UK ministers are developing proposals to require employers in England to pay 25% of training costs for apprentices aged 25 and over.
In Brief
- •UK ministers are developing proposals to require employers in England to pay 25% of training costs for apprentices aged 25 and over.
- •Full funding under the £4 billion annual growth and skills levy would remain reserved for younger apprentices aged 16 to 24.
- •The initiative aims to reverse a 40% decline in youth apprenticeship starts recorded over the past decade amid rising youth unemployment.
- •Official figures reveal Labour's flagship foundation apprenticeship scheme enrolled only 160 participants in its first eight months against a target of 30,000.
Why It Matters
The proposal represents a major shift in England's workforce training policy, seeking to pivot business incentives back toward younger jobseekers as the number of youth not in employment, education, or training nears one million. Restricting full levy access for older workers is intended to rebuild early-career entry points that have eroded significantly over the last decade. However, forcing businesses to co-fund adult apprenticeships risks backlash from employers who previously enjoyed complete control over their training funds. The policy highlights the government's struggle to balance fiscal constraints on businesses with urgent intervention in the youth labor market.
Key Details
- Older Worker Co-Investment Requirement
- 25% of training cost
- Annual Growth and Skills Levy Value
- £4 billion
- 10-Year Youth Apprenticeship Decline
- 40%
- Target Launch Date
- September 2027
- Foundation Apprenticeship Enrollments (8 Months)
- 160 participants
Context & Background
The UK apprenticeship levy was introduced in 2017, requiring businesses with annual payrolls over £3 million to pay 0.5% of their wage bill into a designated training fund. The current Labour administration overhauled the system into the growth and skills levy to give employers broader flexibility over course formats and shorter training programs.
What To Watch
Chancellor John Healey's upcoming tax and spending statement to the House of Commons, scheduled within two weeks, which is expected to include formal measures targeting youth unemployment.
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