Financial incentives of apprenticeships for businesses

UNLOCK THOUSANDS IN SAVINGS

The financial incentives employers can access by employing an apprentice

Across adult care, early years, and funeral businesses, many employers are feeling the pressure of rising employment costs. You are most likely all-too aware of the difficulties facing your sector right now. But did you know that employing an apprentice can unlock substantial financial incentives that go far beyond funded training?

From national Insurance savings, to direct apprenticeship incentive payments, apprenticeships can significantly reduce the real cost of employing and developing staff. For organisations already juggling tight margins and recruitment challenges, these incentives can make a meaningful difference to workforce planning, retention and long-term sustainability. 

What you’re reading right now is a practical guide to the apprenticeship employer incentives available to you. It explains how Connect2Care supports employers across the early years, adult care and funeral services sectors to navigate apprenticeship funding for employers confidently and successfully.

National Insurance savings for employers

One of the most valuable, and often overlooked, incentives that employers can tap into are savings on National Insurance payments. Employers do not pay employer Class 1 National Insurance contributions for apprentices under the age of 25. This applies to earnings up to £967 per week, or £50,270 per year.

In real terms, this can save employers over £3,000 – per apprentice – each year. For organisations employing multiple apprentices, particularly in care and early years settings where staffing numbers are high, the cumulative savings can be significant.

These savings are applied automatically through payroll, reducing ongoing employment costs without the need for additional claims. By lowering the cost of employment, these apprenticeship employer incentives free up budget that can be reinvested into staff support, supervision and training.

£1,000 apprenticeship incentive payments

Beyond National Insurance relief, employers may also qualify for apprenticeship incentive payments. Employers can receive £1,000 for each apprentice aged 16-18, or aged 19-24 who is a care leaver or has an Education, Health and Care (EHC) plan.

These payments are made in two instalments, and are subject to an apprentice being on a programme for at least 12 months. The first £500 payment is made after 90 days, with a second due at the one year mark. 

To see how these incentives work alongside other savings, Connect2Care provides a dedicated National Insurance calculator for employers:

Connect2Care funding calculator

Sounds great, but who can benefit?

Apprenticeship incentives are available to both levy and non-levy employers, as long as they meet the standard eligibility requirements under the English apprenticeship system. This means organisations of all sizes – from small businesses to larger groups – can access the same core financial support.

Connect2Care helps employers identify which incentives they are eligible for, manage funding processes, and deliver sector-specific apprenticeships across early years, adult social care and funeral services.

By guiding employers through apprenticeship funding for employers, apprenticeship employer incentives and apprenticeship incentive payments, we ensure that organisations can focus on workforce growth rather than navigating complex funding rules.

Apprenticeships are more than a route to training; they are a practical way to reduce staffing costs. By taking advantage of National Insurance savings, apprenticeship incentive payments, and other financial incentives of apprenticeships, employers can strengthen their workforce while lowering overheads.

If you want to explore what funding and incentives your organisation could access, Connect2Care is ready to help. Get in touch to find out how apprenticeships can support recruitment, reduce costs, and build a sustainable workforce.

To get your hands on our dedicated funding guide, head to our website now.