How Rachel Reeves’ 2024 Budget Impacts Apprenticeships

As Chancellor Rachel Reeves presented her 2024 Autumn Budget, new changes are set to shape various aspects of the workforce, including apprenticeships. This article breaks down the budget’s potential impacts on apprenticeship opportunities, wages, and incentives for businesses to invest in these essential training programs.

Table of Contents

1. Higher Minimum Wage and Apprenticeship Pay

One of the most prominent announcements in Reeves’ budget was a significant increase in the National Living Wage.

	21 and over	18 to 20	Under 18	Apprentice
April 2024	£11.44	£8.60	£6.40	£6.40
April 2025	£12.21	£10.00	£7.55	£7.55

Traditionally, the apprenticeship minimum wage is set lower than the National Living Wage, but it’s typically adjusted annually to keep up with living costs and economic conditions.

For older apprentices or those in advanced-level roles, there may be added financial benefits as wage standards rise across the workforce. This increase is intended to alleviate cost-of-living pressures on lower-income workers, and apprentices—especially those supporting themselves—could benefit from these upward wage adjustments.

2. Mixed Signals for Employers: New Incentives and Challenges

The budget includes both incentives and cost increases that may affect employers’ ability to fund apprenticeships. A planned 1.8% increase in employer National Insurance contributions, scheduled for 2026, raises the cost of hiring staff, potentially affecting companies’ training budgets. However, Reeves announced a rise in the Employment Allowance for small businesses, designed to help offset this rise in employment costs. For businesses with smaller payrolls, this boost may help maintain apprenticeship offerings by making it more affordable to bring on entry-level trainees.

Additionally, the budget provides relief in the form of reduced business rates for the retail, leisure, and hospitality sectors, as well as a freeze on the small business multiplier. These measures could benefit industries that heavily employ apprentices, such as retail and hospitality, by reducing overall operating costs, which can free up resources for training and workforce development.

3. New Funding for Sector-Specific Apprenticeships

Reeves’ budget also earmarks significant investments in healthcare and infrastructure, which could lead to new apprenticeship opportunities in high-demand fields. The NHS will receive £22.6 billion over the next two years, aiming to tackle staff shortages and improve patient services. With healthcare staffing a national priority, this investment may lead to expanded apprenticeship programs in healthcare fields such as nursing, medical assistance, and allied health professions.

Infrastructure spending will support school renovations, public transport, and road improvements. Such projects often rely on skilled workers, and apprenticeships in trades like construction, engineering, and technical fields may see growth as demand for these roles rises.

4. Educational Budget Changes Impacting Private Institutions

The budget also removes VAT exemptions for private school fees and charitable tax relief, set to take effect in 2025. This tax policy could prompt private schools to re-evaluate their budgets, potentially affecting training programs or apprenticeship partnerships they maintain with businesses. As private institutions adapt, the public sector might play a more significant role in promoting apprenticeships as viable career pathways, particularly for students in state-funded schools.

5. A Path Forward for Apprenticeships

Despite some challenges, the 2024 Autumn Budget brings renewed support for apprenticeships through targeted industry investments and wage adjustments. By combining wage increases with support for small businesses, Reeves’ budget aims to make apprenticeships a sustainable option for young people and employers alike. Apprenticeships will likely see growth in healthcare, construction, and hospitality, sectors where funding, wage improvements, and support for small business align to encourage new talent to enter the workforce.

This budget represents an important moment for apprenticeships, aligning government priorities with the need to equip a new generation with essential skills. Employers, apprentices, and institutions should watch closely to see how these measures play out and prepare to take advantage of new opportunities.