The 2025 Autumn Budget delivered one of the most significant updates to apprenticeship funding in recent years, particularly for SMEs who rely on apprenticeships to build skills, fill talent gaps, and strengthen long-term workforce capability.
Whether you’re planning to recruit new apprentices this year or upskill your existing team, these changes can help reduce costs, remove barriers, and build a more resilient organisation.
In this blog, we’ll break down what the Autumn Budget announced, what it means for your business, and how to make the most of the new apprenticeship funding rules for 2025/26.
Fully Funded Apprenticeships for Under-25s
One of the most impactful announcements is the expansion of full government funding for apprenticeship training and assessment.
Previously, SMEs paid 5% co-investment for most apprentices aged 22–24. From April 2026, apprenticeships for anyone aged 25 and under will be fully funded.
What This Means for Employers
This update removes a key barrier for SMEs by eliminating co-investment costs entirely.
You will benefit from:
- £0 training costs for eligible apprentices
- No co-investment contribution
- Lower risk when hiring younger or early-career talent
- Easier access to skills growth within entry-level and supervisory roles
For businesses already using apprenticeships, this is a cost-saving opportunity. For businesses new to apprenticeships, it removes the final obstacle to getting started.
National Insurance Savings: A Further Financial Boost
The Autumn Budget reaffirmed another major benefit: Employers do not pay Class 1 National Insurance contributions for apprentices under 25 earning up to £50,270.
This is a direct reduction in payroll costs and a significant incentive to invest in early-career roles.
NI Savings Example
- Apprentice earning £24,000 → approx. £2,900 saved per year
- Apprentice earning £32,000 → approx. £4,000+ saved per year
Combined with fully funded training, this makes apprenticeships one of the most cost-effective recruitment and development tools available to UK employers.
Why These Changes Matter for SMEs
For many SMEs, skills shortages continue to be a strategic challenge—especially in leadership, digital, engineering, logistics, care, manufacturing, and customer-facing roles.
The updated Autumn Budget provides the strongest financial incentive yet to build long-term skills through apprenticeships. With these reforms, SMEs can now:
1. Access Talent with No Training Costs
Fully funded apprenticeships free up cash to invest elsewhere in the business, from equipment to staff retention.
2. Reduce Payroll Expenditure
NI exemptions mean significant annual savings, especially for roles with higher salary bandings.
3. Develop Future Leaders Internally
With lower cost barriers, employers can train supervisors, team leaders, and managers through structured development pathways.
4. Future-Proof Their Workforce
Apprenticeships provide consistent skills, standardised training, and stronger retention, supporting long-term sustainability.
How the Apprenticeship Funding Rules 25/26 Support Growth
The updated funding rules emphasise:
- Simplified processes for SMEs
- Clearer eligibility criteria
- Expanded opportunities for new apprenticeship starts
- Reduced administrative burdens
For employers, the message is clear: The Government wants SMEs to use apprenticeships as a primary workforce development tool.
What This Means for Your Business in Practical Terms
If you’re planning to:
- Hire new staff,
- Grow entry-level capability,
- Develop internal supervisors or team leaders,
- Or strengthen your leadership pipeline…
The 2025/26 apprenticeship reforms offer one of the most financially advantageous moments to do so.
Whether you want to recruit new talent or upskill existing employees, these changes allow you to grow capacity with minimal financial risk and maximum long-term return.
Government Skills Reforms to Boost Youth Employment and Training
As part of the recent budget, the UK government has unveiled a £725 million package of reforms aimed at significantly expanding access to apprenticeships, pledging that 50,000 more young people will benefit over the next three years.
Under the new scheme, the full cost of apprenticeships for eligible under-25s at small and medium-sized enterprises (SMEs) will be covered, eliminating the previous 5% co-investment requirement. The reforms also introduce a new wave of “foundation apprenticeships” in sectors such as retail and hospitality, plus upcoming shorter-course options focused on areas like AI, digital and engineering from April 2026, designed to help match training with labour market needs.
In addition, £140 million will fund a pilot programme working with regional leaders (like Mayors) to connect young people, especially those currently not in education, employment or training (NEET), with local apprenticeship opportunities.
Make the Most of the Autumn Budget Changes with Access Industry
At Access Industry, we help SMEs across all sectors understand their funding options and build apprenticeship programmes that fit their workforce needs.
We support employers with:
- Recruiting new apprentices
- Developing internal talent pathways
- Maximising funding efficiency
- Navigating the new 2025/26 rules
- Delivering high-quality, employer-led apprenticeship training
If you want to explore how the Autumn Budget can directly benefit your business, reduce your costs, and strengthen your workforce planning, our team is ready to help.
Unlock fully funded apprenticeships for your business
Speak to our team today and discover how your business can reduce costs, grow talent, and future-proof your workforce.
