Employers with apprentices under the age of 25 will no longer need to pay national insurance contributions (NICs) for them.
Businesses employing apprentices that earn up to £16,000 could save £1,000 under the measures.
The measure was first announced at Autumn Statement 2014 and came into effect on 6 April 2016.
Skills minister Nick Boles, said:
“We’re making it even better value for businesses to take on a young apprentice. Apprenticeships make sense for young people and for business. If you’re an employer not already reaping the benefits, now is the time to act.”
However, a March 2016 report by the Social Mobility and Child Poverty Commission highlighted concerns about apprenticeships for young people:
- between 2010/11 and 2014/15 apprenticeships for those under 25 grew by 4%
- the success rate for 16-24 year olds has dropped to 70%
- many apprenticeships for young people are in low pay and low progression prospect sectors.
Following the abolishment of employer NICs for apprentices, the government is set to introduce plans to improve the quality of business apprenticeships. Changes include:
- £10 million of funding to increase the number of degree apprenticeships available
- the introduction of the apprenticeship levy in April 2017
- employers designing and delivering new apprenticeships ensuring the quality of apprenticeships by establishing an institute for apprenticeships in England by April 2017.