Businesses have seen some big changes since the Labour Party’s election victory, but few announcements have been as impactful as the Chancellor’s Autumn Budget 2024.
One of the biggest revelations? National Insurance Contributions (NICs) are set to increase from this April (2025). For businesses of all sizes, this means higher payroll costs, tighter budgets and more pressure on growth and recruitment.
But here’s the good news: businesses employing apprentices under 25 can benefit from significant National Insurance exemptions and cost savings.
“As an employer, Sodexo invests in apprenticeships to deliver a skilled and engaged workforce, and we appreciate the benefits apprenticeships offer our company. One benefit that is often overlooked is the savings on employer National Insurance contributions for apprentices under the age of 25. Given the changes in NI contributions, supporting apprentices in our business makes great financial sense, as not only are we building a skilled workforce for the future but also offsetting the increased costs.”
— Martin McDonald, Apprenticeship Lead, Sodexo
National Insurance Cost Savings Explained
For apprentices under 25, employers do not have to pay Class 1 employer National Insurance Contributions (NICs) on earnings up to the Upper Secondary Threshold (UST), provided the apprentice meets the qualifying criteria:
✅ Are on an approved UK government apprenticeship standard
✅ Earn less than £967 a week (£50,270 annually)
Having apprentices in your business not only builds a team of motivated, ambitious individuals, but also delivers significant savings—money that can be reinvested into training, development, and growth.
How Much Could You Save?
We’ve calculated the cost savings based on the new NIC rates coming into effect from April 2025:
|
Annual Apprentice Salary |
Savings per Year |
|---|---|
| £20,000 | £2,250 |
| £25,000 | £3,000 |
| £30,000 | £3,750 |
Apprenticeships: A Strong Career Pathway & Long-Term Savings
Apprenticeships don’t have to stop at one level – employees can progress to higher levels, gaining new skills and experience while your business continues to benefit.
Take Aditi, a 17-year-old apprentice at a small pub. She begins her career as a Customer Service Practitioner apprentice (level 2). By 20, she completes a Customer Service Specialist apprenticeship (Level 3) and by 22, she’s completing a Learning and Skills Mentor apprenticeship (Level 4). Throughout her journey, the business benefits from National Insurance savings every step of the way – all while building a highly skilled, loyal team member who grows with the business.
By investing in apprenticeships, you’re not just saving money – you’re creating a resilient, future-ready workforce with strong leadership potential.
Want to See How Much You Could Save?
Use our National Insurance Savings Calculator to find out. Simply enter your apprentice’s salary and our tool will instantly calculate your savings.
Try the NI Savings Calculator Here
Save Money, Build Talent, Future-Proof Your Business
Employing apprentices under 25 isn’t just a cost-saving measure – it’s a smart investment in your business’s future. With ongoing National Insurance savings and the chance to develop a highly skilled, loyal workforce, this best-kept industry secret is one opportunity you don’t want to miss.
And NI isn’t the only saving…
While National Insurance savings for under 25s are a fantastic incentive, they’re just the tip of the iceberg. Employers can also benefit from levy transfers, co-investment funding, and a range of additional government incentives – all designed to make apprenticeships more affordable than many realise. Subject to eligibility, these savings can significantly reduce or even eliminate training costs. Find out more about funding options on our website.