How is the Apprenticeship funded?

The Government funds apprenticeships using the apprenticeship funding rules in place on the date the apprenticeship started. This applies to all employers, both those who pay the apprenticeship levy and those who do not.

Employers choose the training they would like their apprentice to receive throughout their apprenticeship. All new starts must follow an approved apprenticeship standard.

Each apprenticeship standard is in a funding band. These funding bands range from £1,500 to £27,000 and are paid through the employers digital apprenticeship account.

Employers can get help from the government to pay for apprenticeship training.

The amount you get depends on whether you pay the apprenticeship levy or not. You pay the levy if you’re an employer with a pay bill over £3 million each year.

Every employer who pays the levy has a digital account where they can access their levy funds to spend on apprenticeship training.

For non-levy paying employers the Government funding pays between 95% and 100% of the apprentice training costs, up to the funding band maximum. This is known as co-investment. 

What will this cost my business?

Levy paying employers will pay the full cost of the agreed funding band using their Digital Apprenticeship account.

For new starts from 1st April 2024, employers who do not pay the levy, the government will fully fund apprenticeship training costs, up to the funding band maximum for apprentices who at the start of their apprenticeship training are aged between:

• 16 and 21 years old (or 15 years of age if the apprentice’s 16th birthday is between the last Friday of June and 31 August)
• 22 and 24 years old and have either an education, health and care plan (EHCP) provided by their local authority or have been in the care of their local authority and their employer has fewer than 50 employees

For starts before 31st March 2024, for employers who do not pay the levy and have fewer than 50 employees, the government will fully fund apprenticeship training costs, up to the funding band maximum, for apprentices who at the start of their apprenticeship training are aged between:

• 16 and 18 years old (or 15 years of age if the apprentice’s 16th birthday is between the last Friday of June and 31 August); or
• 19 and 24 years old and has either an education, health and care plan (EHCP) provided by their local authority and / or has been in the care of their local authority

Non-levy paying employers taking on an apprentice who does not meet the above age and eligibility criteria will be required to pay the 5% co-investment fee.

An employer contribution fee will be required for:

• All non-levy paying employers recruiting an apprentice aged 22 or over

For more information about funding bands, please visit Apprenticeship Funding Bands.

Any associated cost to the individual will be made clear when you speak with our employer engagement team.

For any agreed associated costs, payments will be made directly to the training provider at the point of enrolment or a payment schedule. Payment schedules can be discussed with our employer engagement team prior to signing contracts. For more information about apprenticeship contribution fees please contact our engagement team on 01206 712043.

Apprentice Minimum Wage

A National Minimum Wage for apprentices was introduced on 1 October 2010. The wage applies to all apprentices aged under 19; and apprentices aged 19 or over in the first year of their Apprenticeship.

As of April 1st 2024 the national minimum wage for apprentices is £6.40 an hour and applies to time working, plus time spent training that is part of the Apprenticeship. This rate applies to apprentices under 19 and those aged 19 or over who are in their first year of the apprenticeship. Apprentices must be paid at least the national minimum wage rate if they’re an apprentice aged 19 or over and have completed their first year.

Employers who use apprenticeship standards to upskill existing staff should avoid reducing an employee’s salary to place them on an apprenticeship. Instead, successful completion of the apprenticeship standard can serve as an opportunity to raise an employee’s salary. It’s important to note that this salary increase is not mandatory for completing the apprenticeship but is advisable to retain valuable staff. 

Employers are free to pay above the national minimum wage and many do so, but employers must ensure that they are paying their apprentices at least the minimum wage. If an apprentice is on a higher wage, the employer must continue to pay that for the remainder of the training or until the apprentice becomes eligible for the full national minimum wage.

You must be at least:

• school leaving age to get the National Minimum Wage
• aged 21 to get the National Living Wage – the minimum wage will still apply for workers aged 20 and under

Current rates

These rates are for the National Living Wage (for those aged 21 and over) and the National Minimum Wage (for those of at least school leaving age). The rates change on 1st April every year.

Apprentices

Apprentices are entitled to the apprentice rate if they’re either:

• aged under 19
• aged 19 or over and in the first year of their apprenticeship

Example: An apprentice aged 21 in the first year of their apprenticeship is entitled to a minimum hourly rate of £6.40.

Apprentices are entitled to the minimum wage for their age if they both:

• are aged 19 or over
• have completed the first year of their apprenticeship

Example: An apprentice aged 21 who has completed the first year of their apprenticeship is entitled to a minimum hourly rate of £11.44.