The £1000 Young Apprentice Payment – SINCE AUGUST 2025
This is the existing incentive that has been running for some time and continues into 2026. If you hire an apprentice aged 16-18, or one aged 19-24 who has an Education, Health and Care Plan (EHCP) or is a care leaver, you receive £1,000.
The payment is made in two equal instalments of £500. It goes from the government to your training provider, who then passes it on to you. It is not deducted from your apprenticeship service account — it's an additional payment on top of training funding.
The £2000 SME Hiring Incentive – FROM OCTOBER 2026
This is a brand-new incentive announced as part of the government's plan to create 50,000 more apprenticeships for young people. From 1 October 2026, non-levy paying small and medium-sized employers will receive £2,000 for every apprentice they hire aged 16-24.
There's an important timing condition: the apprentice must have joined the employer within the previous three months. So if the apprenticeship starts on 1 October 2026, the apprentice needs to have been employed since at least 1 July 2026.
This is on top of the fact that SMEs already pay no training costs for eligible under 25 apprentices (the government covers 100% of training and assessment up to the funding band maximum), and there are no employer National Insurance contributions for apprentices under 25 earning below £50,270.
The £3000 Universal Credit Youth Jobs Grant – FROM JUNE 2026
This is the largest single incentive and it's available to all employers, not just SMEs. If you hire an 18-24 year-old who has been claiming Universal Credit for six months or more, you receive £3,000.
This incentive is expected to support 60,000 young people over three years. Critically, this is the one payment that goes directly to the employer — not via the training provider.
The Youth Jobs Grant can be combined with other apprenticeship incentives. That means if you're an SME hiring a 20 year old who has been on Universal Credit for six months as an apprentice from October 2026, you could potentially receive the £3,000 Universal Credit grant plus the £2,000 SME hiring incentive — £5,000 in total.
What Payments Look Like:
The exception is the £3,000 Universal Credit Youth Jobs Grant, which goes directly to the employer. This may have a slightly faster timeline since it skips the provider step, but the Department's processing time still applies.
Further information can be found here
https://find-employer-schemes.education.gov.uk/interim/growth-and-skills-levy