How apprenticeships can help businesses reduce National Insurance costs
March 3, 2025 2:41 pm
How apprenticeships can help businesses reduce National Insurance costs
For many businesses in today’s current climate, National Insurance (NI) contributions are a significant expense when hiring and developing talent. This is especially true with the latest changes announced in the Autumn Budget 2024, which will see the threshold at which employers start paying NICs for each employee drop from £9,100 to £5,000.
However, many employers are unaware that apprenticeships offer a valuable opportunity to lower these costs while investing in skills development.
By taking advantage of NI exemptions and government-funded training, businesses can reduce employment costs and create a pipeline of skilled talent – whether by hiring new apprentices or enrolling existing employees onto apprenticeship programmes.
What employers need to know about National Insurance savings
One of the most overlooked benefits of hiring apprentices is the opportunity to reduce employer National Insurance contributions.
Businesses that employ apprentices under the age of 25 can benefit from an exemption on Class 1 employer NI contributions if the apprentice earns less than £50,270 a year and is on an approved UK government apprenticeship standard or framework.
This exemption applies not only to new recruits but also to existing employees who meet the eligibility criteria for an apprenticeship.
By enrolling current staff onto apprenticeship programmes, businesses can benefit from NI savings while providing structured development opportunities.
To find out more on National Insurance contributions for apprentices, visit the Gov UK website here.
Who is eligible for an apprenticeship?
A common misconception is that apprenticeships are only for school leavers or new employees. In reality, anyone can do an apprenticeship, provided they meet the eligibility criteria.
To qualify for an apprenticeship, individuals must:
- Be aged 16 or above (there is no upper age limit).
- Not be enrolled in any other government-funded education, including a student loan-funded degree.
- Not hold a higher qualification in the same subject area as the apprenticeship they wish to pursue.
- Have the right to work in England.
- Be a UK national or have the right of abode in the UK (including those with pre-settled status or refugee status).
What about degree-level apprenticeships?
Many businesses assume apprenticeships are only for entry-level roles, but this isn’t the case. Degree-level apprenticeships are also included in the NI exemption.
For companies looking to future-proof their workforce, degree apprenticeships provide an affordable way to develop high-level skills without the traditional costs associated with university education.
At The Apprenticeship College, we offer a range of degree-level courses, including Level 5 (foundation degree), Level 6 (bachelor’s degree), and Level 7 (master’s degree), all focused on leadership, management, and operations.
Fully funded apprenticeship training
For small and medium-sized enterprises (SMEs) that don’t pay the Apprenticeship Levy, additional apprenticeship funding is available to support training costs.
From 1 April 2024, the government now covers 100% of apprenticeship training costs, up to the funding band maximum, for apprentices aged between 16 and 21 years old at the time they start their apprenticeship.
This makes apprenticeships an even more cost-effective option for SMEs looking to upskill their workforce while keeping training costs low.
The Apprenticeship Levy
For businesses that do pay into the Apprenticeship Levy, there are new opportunities to maximise its benefits.
The Prime Minister recently announced a major overhaul of the apprenticeship system in England, introducing a new Growth and Skills Levy that will replace the existing levy.
Key changes include funding for shorter, more flexible apprenticeships and a greater focus on foundational apprenticeships to meet industry demands.
How we can help
At The Apprenticeship College, our training is designed to be accessible and cost-effective for businesses of all sizes.
If your business pays into the Apprenticeship Levy, training can be fully funded using your available levy funds.
For employers that don’t pay directly into the levy, apprenticeships are available at just £750 through government co-investment – making high-quality training more affordable than ever.
If you have any questions about funding opportunities, our team is here to help. Get in touch to find out how your business can benefit.
Finding the right course for your employees
Our courses cater to different levels of experience and career progression, from entry-level qualifications to degree-level apprenticeships, and cover a wide range of industries.
We provide flexible learning options, including online, blended, and workplace-based training, ensuring minimal disruption to business operations. Each programme is delivered by experienced tutors, with dedicated support to help apprentices succeed.
Employers can choose between open cohorts, where employees learn alongside professionals from different organisations, or closed cohorts, which offer tailored training for groups from the same company. This flexibility allows businesses to select the best learning environment for their workforce.
Let’s get your employees enrolled
If your business wants to take advantage of National Insurance savings and apprenticeship funding, The Apprenticeship College can help.
Whether you’re looking to hire new apprentices or enrol existing employees, we can guide you through the process to maximise the benefits.
To explore how apprenticeships can support your business, get in touch with our team today.