Government reverses apprenticeship co-investment hike for under-25s
The apprenticeship sector has received some welcome news this week, with the government confirming that levy paying employers will not be required to pay the increased 25% co-investment rate for apprentices aged 16 to 24 when their apprenticeship levy funds have been exhausted.
Instead, eligible 16-24 year old apprentices will continue to receive full government funding up to the relevant funding band maximum.
The announcement comes just days before the planned changes were due to take effect and represents a significant boost for levy employers looking to recruit and develop young talent through apprenticeships.
A positive outcome for Employers and Apprentices
Earlier this month, concerns were raised across the skills sector regarding the planned increase in co-investment costs for levy-paying employers who had used all available funds in their apprenticeship service account. The change would have increased employer contributions from 5% to 25% for new apprenticeship starts.
Tempdent, alongside many employers, training providers, and industry bodies warned that the increase could reduce apprenticeship recruitment and create barriers to workforce development. Following extensive feedback and lobbying, the government has now introduced an important exemption for apprentices aged 16 to 24.
This means levy paying employers can continue investing in young people without facing the additional financial burden that was originally proposed.
Why this matters
At a time when more UK dental practices are facing skills shortages and workforce retention issues, dental apprenticeships remain one of the most effective ways to build future talent pipelines. Reducing the cost of employing younger dental apprentices helps practices invest in training while creating valuable career opportunities for the next generation.
This decision is particularly important given ongoing concerns around youth employment and the need to encourage more young people into high-quality training and career pathways. Sector leaders have welcomed the move as a practical step towards increasing apprenticeship opportunities and supporting economic growth.
Good news for Dental Employers
For dental practices, the announcement is especially significant.
Many dental employers use apprenticeships to recruit and develop new talent across a range of roles, including Dental Nurse apprenticeships, Oral Health Practitioner apprenticeships and now Dental Receptionist apprenticeships. Apprenticeships provide an effective route into the profession, helping practices build skilled teams while supporting individuals beginning their careers in dentistry.
The exemption for under-25s means that dental practices recruiting younger apprentices can continue to benefit from full government funding when levy funds are exhausted, reducing costs and making apprenticeships an even more attractive workforce development solution.
At a time when recruitment challenges continue across the dental sector, this change provides additional confidence for practices looking to invest in the next generation of dental professionals.
The impact of industry collaboration
The announcement also highlights the value of collaborative industry engagement. FE Week reported that the changes reflect reforms championed by the Association of Employment and Learning Providers (AELP), following concerns raised across the sector, including Tempdent.
This demonstrates the importance of employers, providers, and representative bodies working together to ensure apprenticeship policy supports both learners and businesses.
What happens next?
Although the announcement has been confirmed, the published apprenticeship funding rules are expected to be updated in the coming days to formally reflect the exemption for young apprentices.
As soon as the updated guidance is released, we will review the changes in full and update our apprenticeship funding guide to ensure employers, partners, and apprentices have the most accurate and up-to-date information available.
Until then, the message is clear: this is a positive and significant development for apprenticeship employers, particularly those recruiting young talent and supporting future workforce growth.
We’ll continue to monitor the situation and provide further updates as soon as the revised funding rules are published.