Planning to hire an apprentice? Here’s what’s changing in 2026

Monday 16th March

From April 2026, changes to the National Minimum Wage and apprenticeship funding rules are coming into effect. For employers who already support apprentices – or those considering taking one on – understanding these changes is important for planning ahead.

At the Grimsby Institute, part of the TEC Partnership, our dedicated business engagement and apprenticeship teams across our college provision work closely with employers to help them navigate funding, recruitment and training. We offer a wide range of apprenticeships, from business administration and professional services to construction trades and degree level qualifications, supporting businesses across many sectors.

This guide explains what the new rules mean for employers and how apprenticeships can still provide excellent value for your organisation.

The new National Minimum Apprenticeship Wage

From April 2026, the National Minimum Wage for apprentices will increase to £8 per hour.

This rise reflects the government’s aim to ensure apprentices are fairly paid while gaining valuable workplace skills and qualifications. For employers, this means reviewing pay structures for current apprentices and ensuring new starters are offered at least the legal minimum rate.

While the wage increase may slightly raise payroll costs, apprenticeships remain one of the most cost-effective ways to recruit, train and retain skilled staff.

Financial incentives for hiring young apprentices

Employers who recruit apprentices aged 16–18 are eligible for a £1,000 government incentive payment.

This payment is designed to encourage businesses to invest in young people entering the workforce for the first time. It can help offset some of the costs associated with training, supervision and onboarding.

Apprenticeship funding and the levy

Apprenticeships are funded differently depending on the size of the organisation and whether the employer pays the apprenticeship levy.

Levy-paying employers

From April 2026, the threshold for paying the apprenticeship levy is changing.

Any employer with an annual wage bill of £3 million or more will pay the levy, which is 0.5% of the portion of the wage bill above £3 million.

Levy-paying employers receive these funds in a digital account which can be used to pay for apprenticeship training.

However, there are two key changes employers should be aware of:

Levy funds must now be used within 12 months, reduced from the previous 24-month period.
If the levy account runs out, employers will need to contribute 25% of the training cost, with the government funding the remaining 75%. Previously, the employer contribution was only 5%.

These changes mean that planning apprenticeship recruitment and training more strategically will be important to ensure levy funds are used effectively.

Non-levy employers

For employers who do not pay the levy, government support remains strong.

Currently, if a non-levy employer hires an apprentice aged 16–21, the training costs are fully funded by the government.

From August 2026, this full funding will expand to include apprentices aged 16–24, making apprenticeships even more accessible for smaller businesses looking to grow their workforce.

Other key considerations for employers

Despite changes to wages and funding structures, apprenticeships continue to offer significant benefits to employers. They allow businesses to:

Develop talent tailored to their organisation
Address skills shortages in key sectors
Improve staff retention and progression
Build a skilled workforce for the future

With apprentices working while they learn, businesses benefit from immediate contributions while supporting long-term professional development.

Before employing an apprentice, however, businesses should also ensure they have the appropriate arrangements in place, including:

Public liability insurance
Employer’s liability insurance
These are essential requirements to protect both the employer and the apprentice while they are in the workplace.

How TEC Partnership can support employers

At the Grimsby Institute, we work in partnership with employers to make hiring an apprentice simple and effective.

Our business engagement teams support businesses with:

Identifying the right apprenticeship programme
Understanding funding and levy rules
Recruiting suitable apprentices
Managing training and assessment

With wage increases and funding changes coming into effect, now is a good time for employers to review their apprenticeship plans.

By understanding the new rules and working with an experienced training provider, businesses can continue to benefit from apprenticeships as a powerful way to invest in people, productivity and long-term growth.

If you would like to explore how apprenticeships could support your organisation, the business engagement team at the Grimsby Institute is ready to help guide you through the process.