Update on Government financial incentives for employers in the 2021 budget (Apprenticeships and The Kickstart Scheme)

3/11/21, 1:42 PM

The March 2021 budget has brought more good news for employers seeking to increase their staff capacity (and capability) but need some financial help to do so.  This article compares the two main schemes (Apprenticeships and the Kickstart scheme) in order to help employers make the best choice for their circumstances.

The summary

As we said in the detailed article we wrote last July comparing the two schemes, we still think the Apprenticeship scheme offers overall better value, especially if you are seeking to employ someone for the long-term.  Last July we said the Kickstart Scheme may be slightly more financially beneficial if you only have a short-term need to increase capacity (although when you get into the detail of the financial calculations the differences are far smaller than the headlines suggest).  However, this has now been reduced still further by the increases in financial incentives for apprentices.  More importantly, when you add the ‘hidden’ financial benefit of £4-8,000 of training provided by the apprenticeship scheme, the Apprenticeship looks comparatively even more favourable now than it did last year.  The only major benefit of the Kickstart scheme is that it runs until December 2021 whereas the Apprenticeship financial incentives end in September.  (Although we’re now on our third extension to the scheme so who knows!...)


Financial incentives for employers to recruit apprentices have now been extended to September 2021. They have also been increased so that any apprentice employed from 1 April to 30 September 2021 will come with a £3,000 grant for their employer, regardless of their age (and yes, in theory an apprentice could be 65 years old)!

An apprentice also comes with a minimum of 12 months of training. Depending on the role, the level of this training could be anything from entry level to the equivalent of a Master’s Degree. This also means the training could last anything from 12 months to several years. In the case of Boom Training’s office-based apprenticeships, this usually means 13 to 18 months. The financial value of an apprenticeship training programme ranges from £3-27,000. In our case it’s usually £4-8,000.

All of our apprenticeship training is delivered remotely in the workplace (or at home if apprentices are furloughed or working from home) and has continued uninterrupted through the pandemic.

If the apprentice employed is 16-18 years old, the employer receives an additional £1,000 incentive, i.e. £4,000 in total.

Both financial incentives are paid in 2 equal instalments that become eligible for payment at the 90th and 365th day of employment (and are usually actually paid around 4-8 weeks after this date). So for a 16-16 year old, each instalment is £2,000. For other apprentices, it’s £1,500.

Recruitment of an apprentice is managed by us. Your involvement includes drafting the role specification/job description and interviewing candidates we put forward. We handle the rest of the recruitment process including advertising and interviewing/filtering applicants.

The Kickstart Scheme

The Kickstart scheme is open to employers who employ a 16-24 year old. The scheme is designed as a six-month placement scheme with no commitment required to continue to provide employment beyond this date. Employers can access the scheme directly or through one of 600 government-approved ‘gateway’ organisations.

The placement must:

  • Be a minimum of 25 hours/week for 6 months.
  • Pay at least the National Minimum Wage or National Living Wage.
  • Only require basic training.

Employers are expected to help the young person become more employable with help such as:

  • Looking for long-term employment, including careers advice and goal setting.
  • Support with CV writing and interview preparation.
  • Development of workplace skills.

Placements must be recruited through Jobcentre Plus and be in receipt of Universal Credit.

The scheme pays 100% of the National Minimum Wage (or National Living Wage) for up to 25 hours per week for up to 6 months. This also includes NI contributions and statutory minimum pension scheme contributions.

The scheme also pays £1,500 to cover setup costs (e.g. IT equipment), employability support and basic training. (This can be provided by you, the gateway organisation you use or a training provider)

The Comparison

The table below compares the basic salary cost of a Kickstart scheme employee aged 21-22 earning £8.36/hour with an apprentice earning £5.00/hour.

Kickstart Scheme employee

Example hourly rate

£8.36 £8.36 £8.36 £8.36
Hours per week 25 37.5 25 37.5
No. of weeks 26 26 52 52
Employment cost £5,434 £8,151 £10,868 £16,302
Kickstart scheme subsidy £5,434 £5,434 £5,434 £5,434
Net cost to employer £0 £2,717 £5,434 £10,868
Example hourly rate £5.00 £5.00 £5.00 £5.00
Hours per week 25 37.5 25 37.5
No. of weeks 26 26 52 52
Employment cost £3,250 £4,875 £6,500 £9,7500
Apprenticeship financial incentive -£1,500 -£1,500 -£3,000 -£3,000
Difference £1,750 £658 -£1,934 -£4,118


As the table shows, if the employee is retained for a full year, the cost of the apprentice is actually less than the Kickstart Scheme employee. In addition to this:

  Kickstart Scheme Appenticeship
Eligibility Age: 16-24
In reciept of Universal Credit
Recruitment Managed by employer
Rectricted to JCP referrals
Managed by Training Provider
Open recruitment
Training subsidy £1,500 for 'basic' training Up to £27,000 for training up to Master's Degree level


In conclusion, we would argue that unless you are seeking to employ someone for only six months for a specific piece of fairly low-level work, the apprenticeship scheme is probably a better choice for most employers.

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