Cash Incentives Doubled for new Apprentices, Extended until September

As part of the Spring budget, Chancellor Rishi Sunak confirmed a number of new investments for the FE and skills sector.

In July the Chancellor, Rishi Sunak announced a “brand new bonus” for employers to hire apprentices. As of this week’s announcement, this incentive for hiring apprentices aged 25 and over is set to double and will be extended by six months, now lasting until September 2021.

Through the scheme, if an organisation hires a new apprentice of any age they will receive a £3,000 bonus from the government. For new apprentices aged 16-18, or those under 25 with an Education, Health and Care Plan an additional £1000 will be paid, meaning that employers could receive up to £4,000 for a single apprentice.

The incentives were designed to stimulate the existing success of apprenticeships, with Sunak quoted saying “We know apprenticeships work. Ninety-one percent stay in work or go on to further training.”

Chief Executive of the Association of Employment and Learning Providers Jane Hickie said the financial incentives boost could be a “game-changer” and prove to be “particularly attractive to smaller businesses”.

The scheme was originally scheduled to run from August 1st until January 31st 2021, but after a second extension the scheme will now run until September 31st 2021.

This bonus is a great opportunity for employers to support young people getting into work and benefit from hiring new talent. It means that employers could receive up to £4,000 for hiring 16 to 18 year-old apprentices between April and September 2021. 

The Education and Skills Funding Agency has published details of the eligibility requirements for these new incentives.

Key points for Employers

  • Payments for employers who hire new apprentices.
  • Payment of £3,000 to employers in England for each new apprentice they hire aged under 25, and a £3,000 payment for each new apprentice they hire aged 25 and over.
  • Scheme runs from 1st August 2020 to 31st September 2021.
  • Payments will be in addition to the existing £1,000 payment the government already provides for new 16 to 18-year-old apprentices.
  • Payments will be in addition to the existing £1,000 payment the government already provides for those aged under 25 with an Education, Health and Care Plan – where that applies.
  • Scheme available to levy and non-levy organisations.

Key points regarding payments: 

  • The employer must not have employed the apprentice within the six months prior to the apprenticeship contract start date.
  • There is no limit on the number of incentive payments, and payment will be made directly to employers in two equal instalments, where the apprentice is still in learning at day 90 and day 365.
  • The employer will need to claim the incentive payment via an online apprenticeship system.
  • The current £1,000 payment to employers for hiring a 16 to 18-year-old, remains in place.

To learn more about how to hire an apprentice and receive this bonus speak to our team.

Supporting Jobs After Covid-19

The original announcement came as part of the government’s package of measures to support jobs across the UK. It is the second phase of a three-phase plan to secure the UK’s economic recovery from coronavirus, coming after the furlough scheme and to be followed by a capital spending programme.

The extension of this scheme is in part due to an underlying belief that this support can have a profound impact supporting jobs across the UK, but also in response to a disappointing level of uptake. The latest Department for Education Data shows that 25,420 employers submitted claims for the bonus as of 1 February 2021 – a far cry from the 100,000 incentive payments the Treasury had budgeted for.

The Treasury has since published a “plan for jobs” document, which states these payments will be in addition to the existing £1,000 incentive the government already provides for new 16 to 18-year-old apprentices, and those aged under 25 with an education, health and care plan where that applies.

Alongside apprenticeship incentives, Sunak has also confirmed £127 million for the Plan for Jobs skills measures, including traineeships and sector-based work academies. An additional £32 million in funding over the next two years for the National Careers Service was also detailed, so that 269,000 more people in England can receive “personalised advice on training and work”.


To learn more about how to hire an apprentice and receive this bonus speak to our team.