Make savings for your business - a team of mixed sex and race around a table with laptops and paperwork

Many employers were understandably concerned about April's rise in employer National Insurance contributions from 13.8% on salaries over £9,100 to 15% on salaries above £5,000. With employment costs rising across the board, businesses of all sizes are looking for smart, sustainable ways to control spending. So if you want to make savings for your business without compromising on talent, productivity, or growth, read on.

What many employers don’t realise is that apprenticeships can offer a powerful, and often overlooked, solution. If your apprentice is under 25, on an approved apprenticeship, and earning below the specified threshold, you do not have to pay employer National Insurance contributions on their earnings. This can lead to significant, ongoing cost savings for your business while still allowing you to build a skilled and motivated workforce.

In a time when every pound counts, understanding the opportunities apprenticeships offer, how they work and how they can help you make savings for your business could be a game-changer.

Why Employer National Insurance Changes Matter

Employer National Insurance contributions are a substantial cost for businesses. The April increase has placed additional pressure on payroll budgets, particularly for employers with growing teams or those operating in competitive sectors with tight margins.

For many businesses, the challenge is finding ways to offset these increased costs without reducing headcount, freezing wages, or cutting back on development opportunities. This is where apprenticeships come into their own. Rather than viewing training as a cost, apprenticeships allow you to invest in people while actively helping you make savings for your business.

How Apprenticeships Help You Make Savings for Your Business

Make savings for your business shown by a calculator paper cut in half with the word 'cost' on and a scissors — If you employ or recruit someone under the age of 25 and place them on an approved apprenticeship, you can benefit from a full exemption from employer Class 1 National Insurance contributions on their earnings, up to a very generous threshold.

This exemption applies whether the apprentice is:
A brand-new recruit, or
An existing employee being upskilled through an apprenticeship
That flexibility means apprenticeships are not just for school leavers. They can be used strategically across your organisation to reduce costs and develop talent at the same time.

Real-World National Insurance Savings Explained

Let’s look at what this means in practice.

For example:
If you employ or recruit someone under 25 on a £20,000 salary and put them on an apprenticeship, you will save £2,250 in annual National Insurance contributions. The saving continues until their 25th birthday.

For an apprentice earning £25,000, the saving increases to £3,000 per year.

Multiply that across multiple apprentices, and suddenly you’re not just saving a little, you’re making substantial, recurring savings for your business. These are funds that can be reinvested into growth, technology, employee benefits, or further training.

The Key Conditions for the National Insurance Exemption

An employer generally does not have to pay Class 1 National Insurance contributions for apprentices under the age of 25, provided certain conditions are met. These are the key conditions for the National Insurance exemption:

5 apprentices of mixed ethnic backgrounds can help make savings for your business — 1. Age Requirement

The apprentice must be under 25 years old. This applies from the very start of their apprenticeship. The exemption ends on their 25th birthday, so employers should factor this into long-term workforce planning.
Even so, the savings made during those early years can be significant enough to justify the investment and still help you make savings for your business overall.

2. Approved Apprenticeship

The apprentice must be on an approved UK government apprenticeship standard or framework (like the ones Swarm provides).

These can differ slightly depending on whether the apprenticeship is in:

England
Wales
Scotland
Northern Ireland

In England, apprenticeship frameworks have largely been replaced by apprenticeship standards since 2020, and new apprentices should be enrolled on a standard.

Using an approved provider ensures compliance and guarantees that your business qualifies for the National Insurance exemption, you'll make savings for your business and avoid unexpected costs.

3. Earnings Threshold

To make savings for your business, the apprentice’s earnings must be below the Upper Secondary Threshold (UST) for apprentices.

For the 2024/2025 and 2025/2026 tax years, this threshold is:

£967 per week, or
£50,270 per year

If the apprentice earns above this amount, the employer's National Insurance contributions will only be payable on the earnings above the threshold, not the full salary.

For the vast majority of apprentices, this means employers will continue to make savings for their business throughout the duration of the apprenticeship.

Apprenticeships Aren’t Just for New Hires

One of the biggest misconceptions about apprenticeships is that they are only suitable for young people entering the workforce for the first time.

In reality, the National Insurance exemption applies when using apprenticeships to:

Train up new recruits, and
Upskill existing staff

This means you can enrol a current employee under 25 onto an apprenticeship aligned with their role and immediately make savings for your business, while also increasing their skills, confidence, and loyalty.

Beyond National Insurance: The Bigger Financial Picture

While the employer National Insurance exemption is a major advantage, it’s not the only way apprenticeships help reduce costs.

Other benefits include:

Lower recruitment costs due to improved retention
Increased productivity as employees develop role-specific skills
Reduced skills gaps within your organisation
Access to levy funding or government co-investment for training (visit the government website here for more information)

When combined, these advantages make apprenticeships one of the most effective long-term strategies to make savings for your business while building a future-ready workforce.

Planning for Sustainable Growth

Make savings for your business - a plant growing on a pile of money that a hand is adding to. — Businesses that take a proactive approach to workforce development often outperform those that focus solely on short-term cost cutting. Apprenticeships allow you to balance both.

By reducing National Insurance costs today and developing skilled employees for tomorrow, you create a sustainable model that supports growth without unnecessary financial strain. Over time, these savings compound, especially for employers who embed apprenticeships into their recruitment and training strategies.

Is an Apprenticeship Right for Your Business?

If rising employment costs are impacting your bottom line, apprenticeships are well worth exploring. Whether you’re hiring new talent or developing existing team members, they offer a practical, proven way to make savings for your business without sacrificing quality or capability.

Do get in touch if you’d like to know more. We’d be happy to talk through your options, explain how you can make savings for your business in more detail. We'll help you decide whether an apprenticeship could be the right move for your business.

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