Ministers have confirmed a £725 million package to expand apprenticeships for young people in England over the next three years. The Department for Work and Pensions says around 50,000 additional opportunities will be supported, with reforms aimed at reversing a decade-long fall in starts among under‑25s. The press notice was published on 7 December 2025 and updated on 9 December 2025.
A £140 million pilot will give Mayors new resources to connect 16–24-year-olds, particularly those not in education, employment or training, with local apprenticeship vacancies. The pilot is framed as a place‑based intervention to match training to employer demand and will be run through mayoral authorities.
For small and medium‑sized employers, the government will fully fund training and assessment for eligible apprentices aged under 25 by removing the 5% co‑investment normally required of non‑levy payers. Current rules set that co‑investment at 5%, with the government covering the remaining 95%; the Budget confirms the change for under‑25s in SMEs. Detailed operational guidance will follow.
Additional flexibility will arrive from April 2026 via short, modular ‘apprenticeship units’ in priority areas including digital, advanced AI and engineering. These units are intended to help employers upskill staff quickly while remaining funded through the reformed Growth and Skills Levy.
Government will also work with the defence sector on a suite of flexible, work‑based training options, and a new Level 4 apprenticeship in AI is planned to support development of advanced technical capability. Both measures are signposted in the announcement alongside the core youth offer.
Foundation apprenticeships have already begun to roll out. The first wave went live on 1 August 2025 in construction and the built environment, engineering and manufacturing, digital, and health and social care. Ministers now plan further waves in sectors such as hospitality and retail to widen entry routes for young people.
Budget 2025 sets out system changes to the levy from 2026: levy funds will expire after 12 months rather than 24; the additional uplift to levy accounts will be removed; and where levy funds are exhausted, the government’s co‑investment for levy payers will be set at 75%. Short courses will also start from April 2026 under the levy.
The apprenticeship measures sit alongside the Youth Guarantee. The government is making available more than £1.5 billion across the Youth Guarantee and the Growth and Skills Levy over the spending review period. A Jobs Guarantee will offer six months of paid employment to eligible 18–21‑year‑olds who have been on Universal Credit and looking for work for 18 months.
Officials cite a sustained decline in young people’s apprenticeship starts-down by almost 40% since 2015/16-as a key rationale for the reforms. Earlier 2025 changes also reduced barriers: adults starting apprenticeships from 1 August 2025 do not need to hold or achieve English and maths qualifications to pass, and the minimum apprenticeship duration has been reduced to eight months.
Delivery will be coordinated nationally by the Department for Work and Pensions and Skills England, with a commitment to work intensively with employers on boosting starts while maintaining flexibilities. Skills England will also offer an inward‑investment service to help major investors navigate funding routes and mobilise training quickly.
The Youth Guarantee programme will phase in a Jobs Guarantee from spring 2026 in six initial areas-Birmingham & Solihull, the East Midlands, Greater Manchester, Hertfordshire & Essex, Central & East Scotland, and South West & South East Wales-before national roll‑out. Government estimates indicate around 55,000 young people will benefit over three years.
For policy and delivery teams, key dates are now fixed. Foundation apprenticeships have been live since 1 August 2025; the apprenticeships press notice was issued on 7 December 2025; and the first short courses are due from April 2026. The reforms apply to England for apprenticeship funding purposes; devolved administrations operate their own schemes.
Implications for employers are material. SMEs will see training and assessment costs for eligible under‑25 apprentices covered once the change is implemented, which removes a direct cash contribution line. Levy‑payers face tighter expiry windows and the end of the levy uplift from 2026, making forward planning of starts and spend more important. Providers should prepare for increased early‑career demand and new short‑course delivery models.