100% Funded Training for Under-25s: How the 2026/27 Rules Benefit Small Businesses in the East Midlands
For small and medium-sized enterprises (SMEs) across Nottinghamshire, Derbyshire, and the wider East Midlands, developing early-stage talent has never been more financially compelling.
With the launch of the 2026/27 Apprenticeship Funding Rules, the UK government has introduced sweeping reforms under the Growth and Skills Levy framework. The headline shift? 100% government-funded apprenticeship training for young people aged 16 to 24 at non-levy paying businesses.
If your organisation’s annual payroll is under £3 million, here is everything you need to know about the 2026 funding changes, how to eliminate training costs, and how local employers can tap into added financial incentives.
What’s Changing on 1st August, 2026?
Historically, non-levy employers were required to contribute a 5% co-investment fee toward the total cost of an apprenticeship, with the government covering the remaining 95%. While 5% represented good value, it remained a financial barrier for smaller regional businesses taking on early-career recruits.
Under the updated 2026/27 rules:
- Zero Co-Investment for Under-25s: For any apprentice aged 16 to 24 at the start of their programme, the government now funds 100% of the training and assessment costs (up to the funding band maximum).
- Expanded Eligibility: This extended full funding from the previous 16–21 age bracket up to age 24 across all non-levy employers, ensuring that young adults entering or transitioning in the workforce are fully covered.
- 5% Co-Investment Preserved for 25+: Non-levy businesses hiring or upskilling existing staff aged 25 and older still benefit from government support, paying just a 5% contribution.
Unlocking Extra Support: Grants & National Insurance Relief
The 100% training subsidy isn’t the only perk for East Midlands small businesses looking to grow their workforce this year:
1. The £2,000 Young Apprentice Recruitment Incentive
From October 1, 2026, non-levy employers can claim an additional £2,000 grant when recruiting a new apprentice aged 16 to 24 (provided the recruit joined the business within the previous 90 days). Paid in instalments following the apprentice’s initial 90 days, this cash boost provides direct operational relief during onboarding.
2. £1,000 Support for 16–18 Year-Olds & Care Leavers
Employers taking on a 16–18 year-old (or a 19–24 year-old with an Education, Health and Care Plan or care-leaver background) continue to receive an extra £1,000 incentive payment, split across the first year of training.
3. Employer National Insurance Savings
SMEs are exempt from paying Employer Class 1 National Insurance contributions for apprentices under the age of 25 who earn under £50,270 per year—saving local businesses thousands in extra employment overheads annually.
Why This Matters for the East Midlands Business Community
From advanced manufacturing hubs in Derby to burgeoning digital and professional services sectors in Nottingham and Leicester, regional employers face a crucial demand for workplace-ready skills.
By eliminating training fees for under-25s, local businesses can:
- Fill Early-Career Skills Gaps: Train school leavers, college graduates, or young career-changers directly in company-specific processes.
- Reduce Recruitment Overheads: Combine fully funded training with National Insurance savings and cash recruitment incentives to significantly lower cost-per-hire.
- Drive Local Economic Growth: Retain local talent within Nottinghamshire and Derbyshire, feeding directly into the East Midlands Combined County Authority’s (EMCCA) broader regional economic strategy.
How to Get Started with Prostart
Accessing 100% funded apprenticeship training is straightforward, but reserving and managing funding requires proper setup on the government’s Apprenticeship Service account.
As a trusted East Midlands training provider, Prostart works alongside local employers to:
- Audit Eligibility: Confirm your funding status and identify applicable hiring grants.
- Setup & Reserve Funds: Fast-track account setup on the Digital Apprenticeship Service.
- Source & Onboard Talent: Match your business with motivated 16–24 year-olds ready to start their careers.
Contact the Prostart employer team today to review your 2026/27 funding options and discover how simple hiring an apprentice can be.
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