27 Nov 2025
Apprenticeship changes in the Budget: What automotive employers need to know
Apprenticeship changes in the Budget: What automotive employers need to know
While businesses digest yesterday’s Budget, Apprenticeship Central has cut through the headlines to focus on what it really means for automotive employers.
Behind the jargon, the message is clear: The government wants employers to hire and train young people, and the system is being reshaped to make that happen.
Here are the key changes and what you actually need to care about.
The Growth & Skills Levy - The Apprenticeship Levy as we know it is changing
The Apprenticeship Levy is being replaced by the Growth & Skills Levy, designed to fund both apprenticeships and shorter training routes.
What this means for you:
SMEs can access fully funded apprenticeships for under 25s (previously capped at 22).
Levy funds will now expire after 12 months instead of 24 – so unused money will disappear faster.
From 2026, levy money can also be used on shorter training programmes in priority sectors like engineering, advanced manufacturing and digital.
Eligible courses will be set by Skills England.
Providers must be DfE approved and on the official register
Eleanor Baker Barnes, Commercial Director, says “This is a wake-up call for Levy payers. Without a clear apprenticeship strategy, you’ll lose funding faster than ever before. For SMEs, the fully funded apprenticeships reflect what we’re actually seeing in reality, and that’s more people over 22 wanting to access apprenticecships.”
Youth Guarantee - Government-funded young talent pipeline
£820 million has been allocated to ensure 16–24 year olds are not left out of work or training. This includes a Jobs Guarantee Scheme that fully funds work placements for eligible young people.
What this means for you:
A growing pool of young people entering the workforce
Increased expectation on businesses to provide opportunities
Greater competition for the best early-stage talent
The businesses that will stand out won’t just take young people on, they’ll know how to support and develop them properly.
Apprenticeship system reforms
From April 2026:
Levy funds expire faster (now 12 months)
Government contribution will drop to 75% once levy funds are exhausted
Reduced financial uplift into levy accounts
A streamlined, tighter list of approved apprenticeship standards
What does this mean for you? If you’re a Levy payer, waiting until your pot runs dry just got more expensive. The sooner you plan, the more cost-effective your apprenticeship programme will be.
Wage increases
From April 2026:
Apprentice minimum wage will rise to £8.00 per hour
18–20 year olds increase to £10.85
National Living Wage goes to £12.71
A positive move for young people, but employers will need to balance higher payroll costs with structured development and productivity.
So what do these changes actually mean for employers?
If you strip all this back, the message is simple:
The government is financially backing youth employment
Funding will be more time-sensitive
Poorly planned training will cost more
Those who take a strategic approach will win
This is no longer about ‘whether’ to take on apprentices, it’s about how smartly you do it.
Advice to automotive employers right now
If you’re an employer in automotive, here’s what you should be doing now:
Review your levy position and expiry dates
Identify current and future skills gaps
Plan structured pipelines for under-25 talent
Prepare for wage increases with productivity measures
Get support to make the system work for you, not against you
This Budget isn't about paperwork or policy, it’s a reset.
A reset in how young people enter our industry. A reset in how employers think about training. A reset in how businesses future-proof their workforce.
The winners won’t be the businesses that simply hire apprentices, but the ones who recruit with intent, support with structure and plan with purpose.
Need support? That’s exactly where Apprenticeship Central helps employers turn change into opportunity.
E: enquire@apprenticeship-central.co.uk
W: www.apprenticeship-central.co.uk
M: 07496 571570