Extra £4,500 in benefits if child starts apprenticeship

By the Editorial Team · Wednesday, July 29, 2026

The UK government will provide up to £4,500 annually to parents receiving certain benefits when their child starts an apprenticeship to prevent financial losses caused by the current benefit system. This bursary targets families disadvantaged by the “benefit trap” and is part of wider efforts to boost youth employment and apprenticeship uptake amid rising rates of young people not in education, employment, or training.

Parents receiving certain benefits will be eligible for up to £4,500 annually if their child begins an apprenticeship, part of a new initiative to encourage young people into employment. The bursary aims to address a “benefit trap” where families could face financial losses when a dependent aged 16 or 17 leaves full-time education to start an apprenticeship.

Currently, apprenticeships are treated by the Department for Work and Pensions (DWP) and HM Revenue and Customs (HMRC) as paid employment. This classification means families may lose access to child benefit and some universal credit payments, potentially reducing household income by hundreds of pounds each week. According to the Social Security Advisory Committee, a welfare oversight body, a single parent with a disabled teenage child could see their income fall by as much as £339 weekly if the child takes up an apprenticeship.

Apprentices under 19 must be paid at least £8 per hour, with full-time apprentices earning roughly £258 per week. However, when the loss of benefits is factored in, families might experience a net shortfall of about £80 weekly. Officials emphasize that this situation affects a small group and that, in most cases, families financially benefit when a child begins paid work.

The DWP stated the bursary is targeted specifically at the limited number of universal credit claimants disadvantaged by the current system’s impact on apprenticeship uptake. Funding for the scheme will come from the £1 billion increase to the growth and skills levy announced earlier this year. Work and Pensions Secretary Pat McFadden described the welfare system as needing to act as a “springboard to opportunity” and stressed that the new measures would ensure cost is not a barrier to apprenticeships.

There is some uncertainty regarding how the payments will be distributed. It is expected that the bursary will be awarded to the apprentice, but in certain cases payments may go directly to the parents. Advocacy groups cautioned that unless children contribute their earnings and the bursary to the household, families might still face financial disadvantages. Enver Solomon, chief executive of social justice charity Nacro, welcomed the development, calling it “long overdue” action to remove financial deterrents for young people considering apprenticeships.

This move coincides with broader government efforts to reduce the number of young people classified as not in education, employment, or training (NEET), which has reached a record one million, or about one in eight individuals aged 16 to 24. The figure is projected to increase to one in six by 2031. Other recent measures include up to £8,000 in support for small and medium enterprises hiring apprentices and employer national insurance relief for apprentices under 25, aimed at creating 50,000 new youth apprenticeship opportunities.

Prime Minister Andy Burnham outlined plans to introduce new technical education pathways starting at age 14, allowing students to combine traditional academic subjects with vocational training tailored to local job markets. He emphasized the need to reform the education system to better prepare young people for employment rather than placing blame on them for current outcomes.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.