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What Funding is Available for Apprenticeships in 2020 / 2021?

Apprenticeship Funding

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Funding an apprentice is easier than you think. In fact, in 2020 the UK government made it more affordable than ever before for businesses to fund apprenticeships. 

If your company is thinking about taking advantage of the current grants and incentives available to employers for funding apprenticeships, we encourage you to bookmark this post. We’ll break it down and make it easy to understand the process.


The Apprenticeships Levy

In the UK, apprenticeships are funded in one of two ways. The first is via the Apprenticeship Levy. 

The Apprenticeship Levy is a pot of funding all employers with a payroll bill over £3 million must pay into. They can then access this funding at any time in order to take on apprentices. The funds in the apprenticeship levy pot can also be used to pay for training and upskilling the business’ current staff via apprenticeships.

The Apprenticeship Levy is 0.5% of the total payroll bill, if your business qualifies. If you’d like to learn more about how this works, and how to access this funding, we have a complete guide to the apprenticeship levy here.

If you pay the levy, the government will contribute an extra 10% to your apprenticeship training.

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Non-Levy Payers

Businesses who do not fall under the conditions to pay the apprenticeships levy can fund apprenticeships via government funding.

The government will contribute 95% of the cost of apprenticeship training. T he remainder is usually funded by the business. 

For example, if a course would cost £3,500 in total, then the government would cover £3,325 and the employer would only need to pay £175. 

This is already great value for funding qualifications, but there are other incentives available in 2020/21 too.


Apprenticeship Funding for Small Businesses

It’s also worth noting that if your business has less than 50 employees, the government will fully-fund apprenticeship training if your apprentice is 18 or younger. 

If the apprentice is 19+, a small business will still need to contribute 5%. 


Government Incentives for Taking On Apprentices in 2020/21

Until the 31st January 2021, employers will receive a grant as an incentive for taking on an apprentice.

This scheme was designed to encourage employers to take on new staff and grow their businesses, regardless of the adversity created by the Coronavirus pandemic.

If you hire an apprentice before the deadline, you’ll receive:

  • A £2,000 grant for each apprentice aged 16-24.
  • A £1,500 grant for each apprentice aged 25 and above.

The payment is issued to the employer in two equal installments. Once after the apprentice has completed 90 days of their apprenticeship, and once more when the apprentice completes 365 days of their apprenticeship.

The grant can be used for anything to support your organisation, and you can apply for it through the apprenticeships portal.

If you have any doubts about how to do this, your apprenticeship learning provider will be able to assist you.

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How Will Apprenticeship Funding Change in 2021

It’s true that some apprenticeship grants will end in 2021, as they were created to help stimulate the economy during the COVID-19 crisis. However, the UK government has consistently acknowledged that apprenticeships are a key cornerstone of their economic recovery plan.

This likely means that there will be further incentives announced when the current grants come to an end. 

The government has recently spoken about a new push to retrain people who are in declining industries. This means we are likely to see further incentives to encourage growth industries such as tech, when it comes to hiring and apprenticeships.

Workers are being encouraged to diversify their skillsets to help them become more change-robust and able to adapt as the economy changes. 

Here at NTG Training we believe this may mean the government will offer more incentives for employers looking to upskill their current employees through apprenticeships.


How Do I Access Apprenticeship Funding?

Whether you’re a levy payer or not, apprenticeship funding is accessed through the online apprenticeships service. 

Employers will need to create an account, which will allow them to access their apprenticeship levy pot and apply for grants directly.

The government will be able to assess if you’re eligible for grants this way, as employers need to register their apprentices through this portal also. 


If you’d like help understanding apprenticeship funding and what grants may be available to your business, why not request a call back and one of our friendly and knowledgeable team members will talk you through the process. 

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