Employers in England could face new restrictions on how much apprenticeship funding they can use to train workers aged over 25, under proposals reportedly being considered by the government.
An investigation published by The Guardian on Saturday, 17 October 2026 said ministers were examining changes that could require businesses to meet 25% of eligible training costs for older apprentices.
The proposal is intended to encourage employers to recruit more young people amid concern about declining apprenticeship opportunities.
No final decision has been announced, and the reported arrangement should not be treated as a new rule already in force.
Why the government is considering changes
Apprenticeships allow people to earn a wage while receiving structured training towards an occupational qualification.
They are available to people entering employment and those seeking to develop new skills later in their careers.
However, ministers face growing pressure to improve access for younger workers.
The Guardian reported that apprenticeship starts among young people have declined by around 40% over the past decade, while more than half of new apprentices are now aged over 25.
The reported proposal would seek to make younger apprentices relatively more attractive to employers by changing the financial support available for training older workers.
A possible phased introduction from September 2027 has been discussed, according to the report. That remains an unconfirmed timetable.
How apprenticeship funding currently works
England’s apprenticeship funding system already makes distinctions based on an apprentice’s age and the employer’s funding circumstances.
Larger employers generally pay an apprenticeship levy equivalent to 0.5% of their annual pay bill, subject to a £15,000 annual allowance. In practice, the levy normally applies to employers with annual pay bills exceeding £3 million.
Employers can access funding for eligible training through the apprenticeship service.
Under government funding guidance updated in July 2026, employers that do not pay the levy generally receive government support covering 95% of eligible training costs for apprentices aged 25 or over.
Where a levy-paying employer has exhausted the funds available in its apprenticeship account, the government already contributes 75% of eligible costs for apprentices aged 25 or over, leaving the employer to contribute 25%.
These arrangements apply to relevant apprenticeship starts from 1 August 2026.
The reported new proposal therefore needs to be distinguished from the contribution rules that are already in effect. Its significance would depend on which employers and funding arrangements ministers decide to change.
What the proposal could mean for employers
If the government extends the requirement for employers to meet a greater share of older apprentices’ training costs, businesses could face additional expenditure when supporting workers seeking new qualifications.
This could affect employers that use apprenticeships to develop experienced staff or help workers change careers.
Businesses may respond by offering more opportunities to younger applicants, although that outcome is not guaranteed.
Taking on an apprentice also requires suitable work, supervision and structured training. Lower training costs alone may not be enough to persuade employers to create additional positions.
The proposal could also raise questions about access to retraining for people who need new skills due to changes in their industry or employment circumstances.
Existing measures to support younger apprentices:
The government has already introduced changes intended to make apprenticeships more accessible to younger workers.
Under the 2026 to 2027 apprenticeship funding rules, eligible training costs for apprentices aged 16 to 24 can be fully funded in specified circumstances.
From October 2026, qualifying employers that do not pay the levy can also receive a £2,000 hiring payment for recruiting eligible apprentices in that age group.
These measures are already part of the funding framework and should not be confused with the further changes reported on Saturday.
Government response and next steps
The Department for Work and Pensions has said ministers are committed to reversing the decline in apprenticeship opportunities for young people.
The department also pointed to existing support for younger apprentices and declined to anticipate the conclusions of a review led by former minister Alan Milburn.
That review is examining wider barriers facing young people entering work and training. Its final recommendations have reportedly been delayed until after the budget.
The latest proposal remains under consideration. Employers should continue to follow the published funding rules rather than assume a new 25% contribution will automatically apply to every apprentice aged over 25.
The key questions now are whether ministers formally adopt the proposal, which employers it would cover, and how the government intends to protect opportunities for adults who need to retrain.
