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Apprentices and apprenticeship funding - how does it work?

Updated: Feb 16

If you are a company that uses apprenticeships or have considered using them, the state of the economy during the COVID-19 pandemic may have deterred you. However, things may now have got easier for companies in such a position.

On 8th July 2020, responding to the effects on the economy of COVID-19, the Chancellor presented his mini-budget and foremost in that was the Plan for Jobs. Amongst the measures in the Plan was an announcement that an incentive payment is being introduced to encourage apprenticeships.

What is the scheme and how does it work?

The payment will be made to employers who take on an apprentice between 1st August and 31st January 2021.

There will, of course, be conditions attached. The apprentice:

  • Must be a new employee to the business

  • Have a contract of employment start date between 1st August 2020 and 31st January 2021 (inclusive)

  • Must not have been employed by the employer within the six months prior to the contract start date

There will be no limit on the number of incentive payments that an employer can claim for apprentices eligible to receive funding, provided each apprentice meets the criteria, including being a new employee.

How to claim

Claims can be made by employers from September 2020 through the apprenticeship service.

  • For apprentices aged between 16–24, the payment will be £2,000

  • For apprentices aged 25 and over, the payment will be £1,500

This will be paid in two equal instalments (provided the apprentice is still in place), the first on day 90 of the apprenticeship and the second on day 365.

These payments will be on top of the existing £1,000 payment already provided for new apprentices aged 16-18, and those aged under 25 with an Education, Health and Care Plan – where that is applicable.

Apprenticeship Standards

From 1st August 2020, all new apprenticeship starts must be on standards. Apprenticeship frameworks will no longer be available to new starts, but learners will still be able to complete their framework, providing they started it on or before 31st July 2020. It is intended that all apprentices who started an apprenticeship framework 6 before 1st August 2020 complete their apprenticeship framework by 31st July 2025 (taking into account any breaks in learning that may have occurred).

What are standards?

Apprenticeship standards are employer-led and specify what is required from an apprentice. They are administered by the Institute for Apprenticeships and Technical Education and outline the knowledge, skills and behaviours (KSBs) that are needed to carry out the job role in question. Apprentices are required to take an independent assessment at the end of their training to demonstrate the KSBs set out in the occupational standard.

Further information:

The policy paper can be found here.

The apprenticeship funding rules can be found here.



Looking for more advice or guidance on this matter, or any other business-related issue?

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