£2k To Encourage the Hiring of Apprentices

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With the rampant rise of the unemployment rate, the Chancellor announced from the summer statement, a brand-new incentive for businesses—a bonus payment of £2,000 for every apprentice they take on or hiring an apprentice. But, how will this affect both sides of the coin?

In his last economic statement, Chancellor Rishi Sunak offered companies a package deal that takes effect from August 2020 until January 2021.

During this time, for every new apprentice within the age bracket of 16 to 24 a firm hire, they will receive a bonus payment of £2,000. At the same time, companies who take on young apprentices over 25 years old get an incentive of £1,500.

On UK Apprenticeships – Recently announced UK Spring Budget 2021

On the brighter side of things, payment to businesses for hiring apprentices now sits at £3000, which is double the amount paid before £1500. This is excellent news for businesses looking to take on more apprenticeships at this time of the UK Spring Budget.

This scheme is under the government’s “A Plan for Jobs in 2020” movement—a proactive effort to protect the economy and its people.

The £2k incentive is in addition to the UK’s existing £1,000 business funding for every firm who will give trainees within the age of 16-24 years old, a work experience.

For aspiring apprentices and interested organizations out there, here are the basics of apprenticeship in the UK.

A Guide to Apprenticeship

  • What is an apprentice?

An apprentice is an individual aged 16 or over who is a working student (combining work with studies) wanting to gain a set of skills by working on a specific job. Your apprentice must:

Ø Must be paid at least the national minimum wage

Ø Must work with professional and experienced employees

Ø Must learn job-specific skills

Ø Must have the time to study in their working week

  • How to hire them?

First, choose an apprenticeship standard relative to your industry and at a suitable level. Then, find an organization that trains apprentices, get funding from the government (your discretion), and let the training organization do the work for you (advertising, interviewing).

Lastly, select your chosen apprentice and make a working agreement or contract of employment with them.

  • How long does it last?

Apprenticeship training usually lasts at least 12 months up to 5 years. During this time, you are responsible for paying the time they spent studying and training for the apprenticeship; may it be in a collegiate university or training organization.

Apprentices are also entitled to employment benefits, the same as what your other employees are given, such as paid sick leaves, paid holidays, childcare vouchers, and mentoring support.

What are the changes and concerns?

Everything under the UK’s “Employing an Apprentice” manual still works, save for the government’s offer of £2,000 to encourage companies to hire apprentices.

The Chancellor believes in the capacity of apprenticeship training to result in a full-time job. It also aims to help the citizens, especially the younger generation, in this time of need.

With this scheme, Sunak hopes to triple the number of apprenticeships in the coming months and save thousands of employees from unemployment.

However, some business experts feel this will not be enough of an incentive to get companies on board. With the high cost of quality skill training, the bonus won’t even cover half of it.

But David Hughes, the chief executive of the Association of Colleges, firmly believes that everything will fit together once complete guidelines for the new scheme are released.

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Annette Ferguson

Annette Ferguson

Owner of Annette & Co. - Chartered Accountants & Certifed Profit First Professionals. Helping Online service-based entrepreneurs find clarity in their numbers, increase wealth and have more money in their pockets.

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