Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what estimate he has made of the average cost to a non-Levy-paying firm of employing an 19-year old apprentice in the first year of their apprenticeship, paid at the legal minimum hourly rate for a 37.5 hour week, assuming the employer has more than 50 employees and the apprentice does not have an EHCP and was never in care, in terms of (a) wage cost, (b) apprenticeship training cost and (c) total cost for an apprenticeship started in (i) September 2023, (ii) April 2024 and (iii) September 2026.

Minimum wage rates are reviewed annually and the government considers the independent advice of the Low Pay Commission when setting minimum wage rates.

Regarding wage costs, apprentices are entitled to the apprentice rate if they are either aged under 19 or aged 19 or over and in the first year of their apprenticeship. Apprentices are entitled to the minimum wage for their age if they are both aged 19 or over and have completed the first year of their apprenticeship.

The below table sets out the 18–20-year-old and the apprentice minimum wage rates from April 2023 to April 2026.

Regarding apprenticeship training costs, each apprenticeship standard has a funding band which sets out the maximum amount that the government will contribute to the cost of apprenticeship training and assessment over the full duration of the apprenticeship. Apprenticeship funding bands range from £1,500 to £27,000.

Since April 2024, the government has fully funded apprenticeship training costs up to the funding band maximum for non-levy paying employers for apprentices aged 16-21 and apprentices aged 22-24 who have an Education, Health and Care Plan (EHCP) or have been, or are, in local authority care. For all other apprentices, employers that do not pay the levy are required to co-invest 5% towards apprentice training costs, unless they are in receipt of a levy transfer which covers that cost.

From August 2026, the government will fully fund apprenticeship training for non-levy paying employers for all eligible people aged 16-24, to boost small business starts and prioritise funding to young people. For all other apprentices, employers that do not pay the levy will be required to co-invest 5% towards apprentice training costs, unless they are in receipt of a levy transfer which covers that cost.

To support employers to offer apprenticeships, the government pays £1,000 to both employers and providers for apprentices aged 16-18, and for apprentices aged 19-24 who have an Education, Health and Care Plan or have been, or are, in local authority care. On top of this, employers will receive additional payments of up to £2,000 for eligible foundation apprenticeships to contribute to the extra costs of supporting someone at the beginning of their career. Additionally, employers are not required to pay anything towards employees’ National Insurance for all apprentices aged up to age 25 (when the employee’s wage is below £50,270 a year).