‘For young people, being an apprentice is an absolute win-win. You’ve got a job, you are earning a salary and you get [free] training at the same time,” says Jamie Stevenson, director of business partnerships at South Thames College, south London. “At no point should apprentices make any financial contribution towards their training costs.”
So who does pay for the training – an expensive prospect at higher and degree apprenticeship level? From April 2017 any employer in the UK with a wage bill of £3m-plus, regardless if they employ apprentices or not, must pay an apprenticeship levy – a new tax of 0.5% of their annual pay roll – to help fund 3m new apprenticeship starts up to 2020.
Large employers based in England can reclaim the levy in apprentice training vouchers: for every £1 paid as part of the levy, they get back £1 plus 10% in vouchers to support apprentice training from May 2017 onwards.
Companies with an annual wage bill under £3m are exempt from the levy, yet still qualify for 90% government funding for apprenticeship training and assessment; the employer pays the remaining 10%. Employers with fewer than 50 members of staff, who take on a 16- to 18-year-old apprentice or a 19- to 24-year-old apprentice with disabilities or learning difficulties, will get 100% government funding. In addition, even if apprentices leave a programme prematurely, they are not expected to pay back anything to cover the costs of training and assessment.
Apprentices have to fund living costs themselves. However, for an annual £11 subscription, they can buy an NUS Apprentice extra discount card.
If based in London, apprentices also get a subsidised Oyster card. If they are living independently from their families and face financial difficulties they are encouraged to call their college or other training provider, Stevenson says.
“Some employers will hand out loans and travel allowances. If an apprentice does well, we encourage employers to look at performance and give them pay increments during their apprenticeship.”
