Employers in England could be required to pay a greater share of apprenticeship training costs for workers aged over 25 under proposals being considered by ministers to encourage businesses to recruit more young people.
The government is examining changes that would limit the proportion of training costs covered by the Growth and Skills Levy for older apprentices, according to a report in The Guardian. Under the proposed arrangement, employers would have to contribute 25 percent of eligible training costs for apprentices aged 25 and over, while those aged 16 to 24 would continue to receive full funding.
The plans, which have not been formally announced, form part of efforts to reverse a decline in apprenticeship opportunities for young people. The Guardian reported that apprenticeship starts among younger age groups have fallen by around 40 percent over the past decade, prompting ministers to consider directing more training resources towards those entering employment.
Apprenticeship funding could favour younger workers
The proposals would change how employers use levy funding to support apprentices of different ages. Businesses with annual pay bills exceeding £3 million pay the apprenticeship levy, with the money available through employer accounts to fund eligible training in England.
Under existing arrangements, levy-paying employers can use available funds in their accounts to cover apprenticeship training costs. But changes introduced in August 2026 already require those employers to contribute 25 percent of eligible costs for apprentices aged 25 and over when their levy funds are exhausted, compared with a previous contribution of 5 percent.
The further reform reported by The Guardian would extend the distinction between younger and older apprentices, potentially requiring employers to make additional contributions when training existing staff, even where they would previously have been able to draw on their levy funds. The changes could be phased in from September 2027, although the government has yet to confirm the proposed timetable or publish detailed arrangements.
The distinction is important for employers using apprenticeships to develop experienced workers or support career changes. Apprenticeships are not restricted to people entering the labour market and can provide recognised qualifications and occupational training for employees already established in their careers.
Government seeks to increase youth apprenticeship starts
The proposals follow a series of changes intended to direct more public funding towards younger apprentices and improve employment opportunities for people struggling to enter the workforce.
The government’s Growth and Skills Levy reforms include full funding of eligible training costs for new apprentices under 25, alongside financial incentives for employers recruiting young people. Ministers have also committed additional investment to apprenticeship provision and announced plans to create 50,000 more opportunities.
Other changes introduced in August reduced the period during which newly deposited levy funds remain available to employers from 24 months to 12 months and removed the previous 10 percent government top-up to levy accounts. Funding has been withdrawn from 16 apprenticeship standards for new starts from September 2026, as ministers seek to concentrate resources on younger people and areas where skills shortages are particularly acute.
The wider policy response is taking place against concern about the number of young people not in education, employment or training. Former Labour cabinet minister Alan Milburn is leading a government-commissioned review examining the barriers preventing young people from entering work or education.
Employers face competing workforce development priorities
The proposed funding changes could create difficult decisions for organisations balancing the recruitment of younger apprentices with the need to retrain existing employees. For businesses investing in technical skills, management development or professional qualifications, apprenticeships can provide a structured route for employees to acquire new capabilities without leaving their jobs. Requiring additional employer contributions for older participants could affect decisions about which training programmes to fund.
The potential impact would depend on how the government applies the proposed restrictions, particularly whether employers with sufficient levy balances would also face direct contributions and how existing apprenticeships would be treated.
Ministers are considering the changes as part of their response to the decline in youth apprenticeships. No final decision has been announced, and employers will need further details before assessing the financial implications for their training plans.
William Furney is a Managing Editor at Black and White Trading Ltd based in Kingston upon Hull, UK. His writing focuses on contemporary employment issues including pension schemes, employee health, financial struggles affecting workers and broader workplace trends.
- William Furney
- William Furney
- William Furney
- William Furney
