Few would argue against the principle of increasing the minimum wage. People deserve fair pay, and the recent Autumn Budget confirmed that from April 2026, younger workers and apprentices will see significant increases.
The Challenge: Impact on Apprenticeships
However, the challenge lies in how this change interacts with other systems, particularly apprenticeships. Many businesses, especially the SME market, often view apprenticeships as one of the most expensive employment routes due to:
- Structured training requirements
- The 20% off-the-job mandate
- Additional supervision needs
- Reduced productivity
Increasing wages without adjusting funding, course structures or employer incentives risks shifting the financial burden onto businesses that are already under pressure, especially with the NI increase in 2024.
Encouraging Measures in the Autumn Budget
The Autumn Budget did include some encouraging measures, such as fully funded apprenticeship training for under-25s in SMEs and a £1.5 billion investment in skills through the Youth Guarantee and Growth and Skills Levy. These steps show recognition of the importance of skills development, but they need to work in harmony with a wide ranging, definitive plan. Without alignment, the unintended consequence could be fewer apprenticeship opportunities, particularly in smaller, skills-led sectors, at a time when youth unemployment and NEET figures remain a concern.
Industry Insight
The idea for today’s post was sparked by Martin Wallis-Keyworth from the LTZ Group comment on LinkedIn which summarised the situation perfectly stating.
“The policy itself is not wrong. It is incomplete. And incomplete policy can damage the very system it seeks to support. Employers who cannot absorb the added cost may simply stop taking on apprentices, and it will be the young people this policy aims to protect who lose out on a genuine pathway into skilled work.”
The Government has increased wages with the best of intentions, but individual ideas do not work in isolation, they need to form part of a singular national strategy that works across departments to revitalise the recruitment of young apprentices.
The Solution: Collaboration
Government, education providers and industry must come together to ensure that wage increases are matched by reforms that make apprenticeships sustainable for employers. This means:
- Reviewing funding models
- Simplifying processes
- Creating incentives that encourage businesses to invest in future talent
The Bigger Picture
The Budget sets the national agenda, but the real impact will depend on how these measures are implemented locally. If we get this right, we can deliver fair pay and expand opportunities for young people. If we don’t, we risk undermining one of the most effective routes into skilled employment and a generation of young people will bear the brunt for life.
By Craig Mincher, Managing Director at WBTC