Budget 2026: What It Means for Apprenticeships and Young People
The Budget published on 28 October 2026 sets out what the government plans for wages, apprenticeships and young people over the next two years. Some measures are new, some confirm what was announced in the spring. If you employ apprentices, run a training provider or college, or support 16 to 24 year olds into work, here is what changes, when it happens and what to do about it now.
Budget 2026 at a glance
The headline for anyone working with young people is that the government says it "refuses to write off" the nearly one million young people who are not in education, employment or training (NEET). The Budget's answer is a mix of higher minimum wages, more local apprenticeship support, incentives for employers who hire young people and a promise of wider welfare and work reform next year.
| Measure | What the Budget says |
|---|---|
| Minimum wage rises | From 1 April 2027 all National Living Wage and National Minimum Wage rates rise by 3.9%, benefiting around 2.3 million workers. |
| Apprenticeship brokerage | £100 million across 2027-28 and 2028-29 to expand Mayoral Apprenticeship Brokerage Pilots from 7 to 14 Mayoral Strategic Authorities in England. |
| Hiring incentives (confirmed) | The £3,000 Youth Jobs Grant, the Jobs Guarantee extended to 22 to 24 year olds, and a £2,000 apprenticeship hiring payment for non-levy employers in England. |
| Union Learning Fund | Re-established in England with £15 million a year from 2027-28. |
| Apprentices on public projects | At least 3% of the workforce on large government construction and infrastructure projects must be apprentices. |
| Young Entrepreneurs Allowance | A pilot in England to help with living costs in the first year of a new business. |
| Welfare and work reform | A White Paper early in 2027, responding to Alan Milburn's review of young people and work and the Timms Review. |
What happens to apprentice and youth pay
The government accepted the Low Pay Commission's recommendations in full. From 1 April 2027 every rate rises by 3.9%:
| Rate | Now (April 2026) | From 1 April 2027 |
|---|---|---|
| National Living Wage (21 and over) | £12.71 | £13.21 |
| 18 to 20 year olds | £10.85 | £11.27 |
| 16 to 17 year olds | £8.00 | £8.31 |
| Apprentice rate | £8.00 | £8.31 |
Remember who the apprentice rate applies to. An apprentice can be paid it if they are under 19, or 19 or over and in the first year of their apprenticeship. Once they are 19 or over and past the first year, they are entitled to the minimum wage for their age. For a full-time worker on the National Living Wage, the Treasury puts the rise at £910 a year in gross earnings.
For employers: update payroll and apprenticeship budgets for April 2027 now, and check the age and year of every apprentice. A 19 year old finishing their first year in mid 2027 moves from £8.31 to £11.27 an hour, which is a bigger jump than the 3.9% headline suggests.
More local help to create apprenticeships
The biggest new apprenticeship measure is £100 million over 2027-28 and 2028-29 to double the Mayoral Apprenticeship Brokerage Pilots, from 7 to 14 Mayoral Strategic Authorities across England. The Treasury says this will let every current mayor offer tailored support to young people and employers, particularly small and medium-sized businesses, so more apprenticeship opportunities get created.
For training providers and colleges, this means local brokerage teams will be looking for providers who can deliver well for SMEs that have never taken on an apprentice before. Those employers often worry most about whether a young recruit will settle in and stay. Strong support with behaviours, confidence and work readiness makes your offer easier for brokers to recommend. Our guide to why apprentices leave early covers the retention side in more depth.
The Budget also requires at least 3% of the workforce on large government construction and infrastructure projects to be apprentices. Expect demand for construction and infrastructure apprentices to rise where those projects are based.
Incentives for hiring young people
The Budget confirms the Youth Employment and Skills Package announced in spring 2026:
- Youth Jobs Grant: £3,000 for businesses hiring eligible young unemployed people.
- Jobs Guarantee: for eligible 18 to 24 year olds on Universal Credit, now extended to those aged 22 to 24.
- Apprenticeship hiring payment: £2,000 for new young apprentices taken on by non-levy paying employers, typically SMEs, in England.
Together with brokerage, these lower the cost and risk of a first hire for smaller employers. The catch is that money gets a young person through the door; it does not keep them there. Employers consistently say young recruits need more help with soft skills and work readiness, which we covered in the employability skills employers say young people lack.
Young people who are NEET
The Budget describes almost one million young people as NEET and says the welfare system should be a springboard, not just a safety net, echoing Alan Milburn's interim report on young people and work. Alongside the Jobs Guarantee, it includes £3 million for Team Plymouth to help NEET young people into the local defence industry, and a pilot Young Entrepreneurs Allowance in England to support living costs during the first year of a business.
The bigger changes are still to come. The government will respond to the Milburn and Timms reviews, with a White Paper early in 2027 and legislation later that year. For the latest picture of who is NEET and why, see our round-up of the 2026 NEET figures.
Workplace learning and the Union Learning Fund
The Union Learning Fund comes back in England, with £15 million a year from 2027-28 for union-led projects that support learning and training among workers. For employers with union recognition, this could become a new way to fund upskilling alongside apprenticeships.
What to do now: a checklist
- Re-cost apprenticeships for April 2027. Use the new rates and check when each apprentice turns 19 or finishes year one.
- Find your mayoral brokerage team. If your area is one of the new authorities, make contact early so your offer is known when the pilot starts.
- Check eligibility for incentives. Non-levy employers in England hiring young apprentices should check the £2,000 payment, and anyone hiring young unemployed people should check the Youth Jobs Grant.
- Plan for retention, not just recruitment. Build in onboarding, confidence and work-readiness support from week one.
- Gather evidence of progress. Funders, brokers and Ofsted all want to see distance travelled, so measure confidence and skills before and after.
- Watch for the White Paper. Changes to youth welfare and work support are due early in 2027.
Where Fledglings fits
New funding will bring more young people into apprenticeships and first jobs. Fledglings helps them stay and thrive. We offer short, scenario-based modules across four curricula on one platform: employability, confidence and resilience, financial literacy and online safety. They are built by people the same age as the learners, so the situations feel like real life. Financial literacy is especially relevant when a pay rise or first wage arrives.
Every module opens and closes with a self-reflection, giving you distance-travelled evidence without extra admin, and engagement can be broken down by cohort. In an eight-week trial with Swift Childcare, 95% of apprentices' paired before-and-after self-ratings went up. Read about the Swift closed trial or see our employability skills training for apprentices.
Common questions
What did Budget 2026 announce for apprenticeships?
£100 million across 2027-28 and 2028-29 to expand Mayoral Apprenticeship Brokerage Pilots from 7 to 14 areas in England, a requirement that at least 3% of the workforce on large government construction and infrastructure projects are apprentices, and confirmation of a £2,000 hiring payment for non-levy employers taking on new young apprentices.
What will the apprentice minimum wage be in April 2027?
From 1 April 2027 the apprentice rate rises by 3.9% to £8.31 an hour, the same as the rate for 16 and 17 year olds. The rate for 18 to 20 year olds rises to £11.27 and the National Living Wage for those 21 and over rises to £13.21.
What support is there for young people who are NEET?
The Budget confirms the Jobs Guarantee for eligible 18 to 24 year olds on Universal Credit, the £3,000 Youth Jobs Grant for employers, a pilot Young Entrepreneurs Allowance and £3 million for a NEET programme in Plymouth's defence industry, with a White Paper on youth work and welfare due early in 2027.
Help new apprentices settle in and stay
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