England to Charge Firms 25% More to Train Older Workers

By Daniel Okafor

Employers in England would pay 25% more to train a worker over 25 than to train a youth apprentice under plans being drawn up by the government. The Guardian, which first reported the proposal, understands ministers want to overhaul Labour's apprenticeship funding scheme and use price as the lever.

The mechanism is simple. Government sets the subsidy rules for the Growth and Skills Levy, the reworked version of the apprenticeship funding scheme. Under the plan, training for anyone aged 25 or older would carry a 25% higher cost for the employer. Training a 16-to-24-year-old would stay cheaper. The gap is designed to change behaviour at the point where firms decide whom to hire and whom to train.

What does the plan actually change?

The proposal targets funding rules, not hiring law. No employer would be barred from taking on an older apprentice. The state would simply make that choice more expensive. A firm weighing two candidates — one 22, one 30 — would face a direct financial penalty for picking the older one, because the subsidised training rate would differ by a quarter.

The Guardian frames the move as part of the government's answer to the youth jobs crisis. Young workers have borne the brunt of weak entry-level hiring, and apprenticeships remain one of the main routes from school into skilled work. Ministers, according to the report, believe the current funding scheme lets employers spend levy money on older staff when the money was intended to build the junior pipeline.

Why price, not mandates?

Governments have three broad tools here. They can mandate outcomes, cap spending by age band, or shift relative prices. This plan takes the third route. It keeps employer choice intact but tilts the arithmetic. A 25% differential is large enough to register in a training budget yet small enough to avoid an outright ban on adult apprenticeships.

The levy itself is the instrument. Labour's Growth and Skills Levy, administered through the government's employer schemes portal, is the pot employers draw on for apprenticeship training. Changing what a course costs by age group changes who gets trained, without new legislation on hiring itself.

Who wins and who pays?

Youth apprentices gain the strongest protection. Their training stays at the cheaper rate, and employers now have a financial reason to prefer them. The government gains a policy lever aimed squarely at the youth jobs crisis it has promised to address.

Older workers carry the risk. Anyone over 25 seeking to retrain — career changers, returners, those displaced from shrinking sectors — becomes more expensive to hire into an apprenticeship. Employers deciding between candidates may respond exactly as the design intends, and that intent cuts against the older applicant.

Employers pay through adjusted funding rates. The proposal does not add a new tax. It reprices the existing subsidy so that adult training draws more from the firm's own pocket than youth training does.

What happens next?

The plan, as The Guardian reports it, is still being drawn up. Ministers are considering the overhaul; nothing has been legislated. The key detail to watch is the drafting of the funding rules for the Growth and Skills Levy — the point at which a considered proposal becomes a published rate card that employers must budget against. If the 25% differential survives into those rules, England's apprenticeship market will price age for the first time.