The Cost of Apprenticeships

Apprenticeship benefits?

Apprenticeships have been in the news in recent years as a solid alternative to the ‘flight path’ route to employment which suggests students go from GCSEs to A Levels, on to University and then into graduate-level jobs.

The Apprenticeship Levy placed on UK businesses since 2017 has collected funds from large employers (based on 0.5% of any company’s salary bill which exceeds £3 million a year) and planned to bring in over £3bn by 2020/21. This Levy was then destined to be used by employers to create and fund the apprenticeships they needed in their industries to meet the needs of the future. Good plan.

In theory, they’re fantastic. A skills-based qualification which pays the young person WHILE they learn and an average of 300,000 a year have been started since 2019. Young people are signed up for a minimum of 30 hours of on and off-the-job training and can be studied at different levels.

So far, so great eh? Well, there’s a bit more to the apprenticeship story than meets the eye. Whilst there are great opportunities for the young people involved and a number of them will go onto securing full time jobs with the employers who sponsor their learning, accepting an apprenticeship can affect other aspects of a family household’s income.

Recently I chanced upon a discussion in a Careers-focused Facebook group regarding apprenticeship choices and benefits. In essence, a student at the school of one of the careers advisors on the group was asking about changes to the parents’ benefits / income support / Universal Credit if the student decided to take on an Apprenticeship with a local company – as opposed to taking a non-advanced FE Course.

Because I’d never heard of this before, I did some research. According to the Gingerbread Charity:

A child staying on at school or doing a NON-ADVANCED course at FE is still seen as a dependent and can continue to be funded and supported within the family budget as a child so child benefit and tax credits are still applicable.

A child applying to and getting accepted for a full-time advanced or higher apprenticeship regardless of the level of pay, (sometimes as low as £4.15 an hour) is no longer seen as a dependent so the parent must alert the authorities. Doing this will mean that they will lose Child Benefit. The parent will also lose housing benefit for that young person and their Family Tax Credits and Council Tax reduction entitlement will also change.

It is very likely that anyone starting an Apprenticeship will have additional costs and expenses for transport, possibly clothing, food and more daily expenses. It would seem that to reduce the family budget at this time is likely to act as a disincentive for parental support, could reduce motivation for the young person to choose an apprenticeship and potentially affect the life-chances of that young person throughout their career.

It’s important that careers advisors, teachers and parents are aware of this situation because although lifting the life chances of the young person in a family through an apprenticeship is admirable and positive, to do so at the expense of the living standard of the whole family could be very costly indeed – both financially and socially.

About the Author

Andrew ‘Bernie” Bernard is a speaker, an entrepreneur, a Director of National Careers Week and an author. His first book for Independent Thinking, The Ladder, is published in February. Twitter: @EnterpriseSBox

For more tips and guidance, sign up for our newsletter!