Eligible non-levy employers taking on young apprentices can receive £2,000 from the government, potentially helping convenience retailers bring new talent into their stores
Convenience retailers could receive a £2,000 payment when they take on a young apprentice under a new government incentive aimed at encouraging small businesses to create more opportunities for young people.
From today (1 October), eligible non-levy employers can receive the Apprenticeship Hiring Payment when they recruit an apprentice aged 16 to 24 as a new employee.
The payment is designed to help smaller businesses meet some of the costs associated with employing an apprentice and does not require the employer to make a separate application.
Instead, the government will automatically check eligibility and pay the money to the apprentice's training provider, which will then pass it on to the employer.
The payment is made in two £1,000 instalments. The first is due after the apprentice has completed 90 days, while the second is paid after one year, or after 242 days for shorter apprenticeships and foundation apprenticeships.
“This apprenticeship support is a fantastic opportunity for small businesses to get access to exceptional talent, and in return, gain the fresh energy, ideas and loyalty that come from investing in someone’s future,” business secretary Jonathan Reynolds said.
The incentive comes against a backdrop of low apprenticeship recruitment among small businesses. Research published by Co-op in February 2025 found that small businesses were 18 times less likely to offer an apprenticeship scheme than large businesses.
Among small businesses that were not proactively recruiting apprentices from lower socioeconomic backgrounds, 29 per cent cited insufficient funding to support apprenticeship programmes as a reason, while 38 per cent pointed to a lack of time and resources and 14 per cent to concerns over increased training costs.
The new £2,000 payment could therefore help address one of the financial barriers identified by smaller businesses, particularly for retailers considering taking on a young person for the first time.
The new payment is part of the government's wider push to increase the number of young people starting apprenticeships. It says an additional £2.5 billion investment in the Youth Guarantee and Growth and Skills Levy will deliver almost one million opportunities, including 50,000 additional youth apprenticeships.
The Federation of Small Businesses (FSB), which campaigned for the return of an apprenticeship hiring incentive, said the payment would help small firms manage the additional costs associated with taking on apprentices.
“The new £2,000 incentive for non-levy paying employers will give small firms much-needed extra support to take on and train up more apprentices and help tackle the growing challenge of young people not in education, employment or training,” Craig Beaumont, executive director of FSB, said.
He noted that the £2,000 incentive could be particularly valuable when combined with other available support, potentially creating a package worth up to £8,000 per apprentice.
“We’d encourage small business owners to make the most of this support,” Beaumont said.
The government has also launched a new version of Apprenticeships.gov.uk, intended to provide businesses with information on eligibility, funding and support, as well as allowing employers to calculate the funding they may be entitled to.