Cash for Commitment: Incentive Payments for Hiring Young Apprentices

Apprenticeships are one of the smartest investments a business can make as they help to build skills, fill gaps, and grow their own talent. But did you know there are also financial incentives available when you hire a young apprentice?  

If you’re thinking about taking on a new apprentice aged 16 to 18, or supporting a young person with additional needs, here’s what you could be entitled to.  

The £1,000 employer incentive payment  

If you hire an apprentice who is:  

• Aged 16 to 18, or  

• Aged 19 to 24 and has either been in care or has an Education, Health and Care Plan (EHCP),  

your business will receive a £1,000 government incentive payment. This funding is designed to encourage employers to create opportunities for younger people, helping them take that crucial first step into work while supporting your organisation’s future skills pipeline.  

How does this payment work?  

You don’t need to apply separately for the £1,000 payment, it’s automatically handled through your training provider, who will pass it on to you in two instalments:  

• £500 after 90 days of the apprentice’s start date  

• £500 after 365 days  

This makes the process simple and ensures your business benefits as your apprentice settles in and progresses.  

Is there any other funding?  

The £1,000 incentive is in addition to other apprenticeship funding available, depending on your business operations.  

That means:  

• Non-levy paying employers pay nothing at all for training if their apprentice is aged 16–21 (or 22–24 with an EHCP or care background).  

• Non-levy-paying employers only contribute 5% of the training costs, with the government covering the other 95% for those over 21 (not with an EHCP or care background).  

• You can also benefit from levy transfer funding from larger employers, which can cover 100% of your training costs.  

• National insurance exemptions (Class 1 NIC) when hiring apprentices under the age of 25 earning less than £967 per week.  

So not only can you claim the £1,000 incentive, and make business savings on national insurance, but you can also have the training fully funded.  

Getting started  

Having a young apprentice isn’t just about funding though. You are giving someone a chance to build their future, bringing fresh energy and ideas into your business and building a workforce with the right skills for the future of your company.   

If you’re considering an apprenticeship but unsure where to start, our Apprenticeship Team can guide you through all the logistics, such as setting up a Digital Apprenticeship Service (DAS), managing your incentive payments and accessing the right funding for your size.    

For more information, you can book in a call with our apprenticeship team here.