When a 17‑year‑old takes an apprenticeship and starts receiving a wage, it can reduce household Universal Credit payments — sometimes by more than the apprentice will earn. To address that disincentive, the government has announced a new package of support that will give some parents on benefits up to £4,500 a year so their children can begin apprenticeships without the family losing essential income.
What ministers are changing
The scheme is designed to replace the benefits households would otherwise lose once a young person is classed as being in paid employment. Officials say the measure will help families who currently face a drop in payments of between £17 and £330 each week when a child starts an apprenticeship.
- The bursary will be paid from a £30m fund, financed by the growth and skills levy on employers with wage bills over £3m.
- It is intended to benefit an estimated few thousand households where the loss of benefits outweighs apprenticeship wages.
- The change sits alongside wider measures to fully fund apprenticeship training for under‑25s and additional employer incentives.
Why ministers say it is necessary
A government review by the Social Security Advisory Committee highlighted the "perverse effects" of the current benefits rules, which can deter young people from taking apprenticeships. The committee gave examples where families could lose far more in benefits than the apprentice would gain in pay — undermining efforts to reduce the number of young people not in education, employment or training (NEET).
"By providing bursaries to those who need them most and fully funding apprenticeship training, we are making sure cost is not the reason someone misses out," said Work and Pensions Secretary Pat McFadden.
Scale and consequences
Official figures show more than a million people aged 16 to 24 are currently NEET. Commentators and advisory bodies warn the scale of the problem could grow, with one recent report suggesting one in six young people could be NEET within five years unless action is taken. The new bursary targets households where the immediate financial effect of an apprenticeship is negative — for instance, single parents with a disabled child who might otherwise lose up to £340 a week, while the expected apprenticeship pay could be around £258 a week.
| Item | Amount |
|---|---|
| Maximum annual bursary | £4,500 |
| Government fund | £30m |
| Weekly benefit loss examples | £17–£330 |
| Example weekly loss cited | £340 |
| Typical apprenticeship pay quoted | £258 |
Political reaction and next steps
The Conservatives welcomed the Prime Minister’s stated support for apprenticeships but criticised the proposed funding route. The bursary will be financed by the growth and skills levy on large employers, a point likely to be debated in parliament as ministers press the wider case that employment and training support must not leave families worse off.
Officials say the change will remove a practical barrier for some families and help young people "earn and learn". The measure is modest in scale relative to the overall challenge of youth unemployment and NEET rates, but for affected households the difference between staying on benefits and taking on an apprenticeship can be decisive.
