In response to the Chancellor’s Autumn Budget delivered last week, apprenticeship provider Total People has described the decision to fully fund apprenticeships for individuals under 25 at SMEs as a welcomed and notable development.
In what is a significant milestone for SMEs seeking to address their skills needs via apprenticeships, the budget removes the 5% co-investment cost that has long been a barrier for many smaller organisations looking to hire an apprentice or reskill employees via apprenticehsips.
Melanie Nicholson, Managing Director of Total People, commented: “Removing co-investment costs for under-25 apprenticeships is a significant move that will enable SMEs to develop young talent to meet their skills need.
"With this expected to take effect from April 2026, we are hopeful that it will very quickly unlock opportunities for SMEs to both create new entry-level roles and accelerate staff progression.
"The change should open doors for smaller firms to grow their workforce strategically, develop skills in-house, and future-proof their operations.
Coupled with the Youth Guarantee, this will help more young people start, stay and succeed in work, while giving SMEs the confidence to invest in developing new talent and plan for sustainable future growth.
While the move announced in the budget will see employers remain responsible for apprentices’ wages, the £725million of support for apprenticeships will enable SMEs to invest in talent without the co-investment costs that have previously been attached to apprenticeships.
The announcement forms part of a wider skills package designed to boost youth employment and support economic growth, including an £820m Youth Guarantee for 18–21-year-olds. This guarantee promises every 18–21-year-old access to an apprenticeship, college place or tailored job support, with paid work offered after 18 months.
Nicholson added: “Overall this a positive step towards unlocking opportunities for both businesses and young people. Apprenticeships offer a unique blend of practical experience and structured learning, equipping individuals with the skills employers need today and tomorrow.”
