The UK government will pay parents on Universal Credit up to £4,500 a year if their 16- or 17-year-old child starts an apprenticeship, as part of a plan to tackle youth unemployment and remove welfare disincentives. The bursary, announced by Work and Pensions Secretary Pat McFadden, targets families who would otherwise face financial losses when their child leaves full-time education for work-based training.

Why the £4,500 Apprenticeship Bursary Was Introduced

A Whitehall advisory report earlier this year revealed the benefits system "unintentionally penalises" families when teenagers take up apprenticeships. Single parents with a disabled child could lose up to £340 per week in benefits—more than the average apprenticeship wage of £258. The Social Security Advisory Committee warned of an "apprenticeship cliff-edge," where parents discourage their children from pursuing vocational training to avoid income drops.

The £4,500 bursary aims to offset these losses, with funding drawn from the Growth and Skills Levy paid by large employers. Government sources said the scheme will initially support "low thousands" of households, focusing on 16- and 17-year-olds with disabilities in single-parent families. Around £30 million has been allocated to the program, which will operate on an opt-in basis.

Broader Measures to Reduce Youth Unemployment

The bursary is part of a wider £287 million package to create 22,000 additional college and training places, including expanded construction courses for careers like bricklaying and plumbing. Latest data shows 1.01 million 16- to 24-year-olds were neither in education, employment, or training (NEETs) between January and March—the highest figure since 2013. Former Labour minister Alan Milburn warned this could rise to one in six young people by 2031 without intervention.

Small and medium-sized businesses will also receive up to £8,000 in financial support for hiring young apprentices. Education Secretary Lucy Powell said the government is "determined to help thousands more young people gain the skills and confidence they need," while Mayor Andy Burnham announced plans to let 14-year-olds combine academic subjects with technical education linked to local job markets.

  • £4,500 bursary per household for parents on Universal Credit
  • £30 million allocated to fund the scheme
  • £287 million invested in 22,000 additional training places
  • £8,000 support for employers hiring young apprentices
  • 1.01 million NEETs recorded in early 2024—highest since 2013

What Happens Next

The Department for Work and Pensions (DWP) is finalizing details on whether the bursary will be paid to parents or directly to apprentices. The scheme is expected to launch later this year, with officials monitoring its impact on youth employment rates. Disability charity Scope called the bursary a "positive step," while construction firm Balfour Beatty praised the government’s commitment to removing barriers for young workers.