England degree apprenticeships plateau as employers cut hiring over rising costs

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Degree apprenticeships plateau in England

Highlights

Degree apprenticeship starts in England have plateaued at 25,030 in 2022-23, 26,250 in 2023-24, and 26,780 in 2024-25, with 25,140 in the first three quarters of 2025-26, as higher wage costs and compliance demands deter employer recruitment.
Employers like Trust Electric Heating and Pickerings Lifts cite rising minimum wages—up by a fifth since the 2025 Budget—and economic uncertainty as reasons for halting or slowing apprenticeship hiring, prioritizing resilience over expansion.
The UK government has pledged support for more than 22,000 new professional apprenticeships annually for under-25s and 40,000 construction placements, while offering small and medium-sized businesses £2,000 incentive payments per apprenticeship.

Hiring costs slow apprenticeship recruitment

As reported by Financial Times, citing the Department for Work and Pensions, degree apprenticeship starts in England have flattened in recent years despite strong student demand for the earn-as-you-learn route. The figures cited in the report show totals of 25,030 in 2022-23, 26,250 in 2023-24 and 26,780 in 2024-25, while the latest data for the first three quarters of 2025-26 stand at 25,140.

Employers that have scaled back recruitment say higher wage costs for younger workers and compliance demands are making long-term commitments harder to justify. The pressure comes after rises in the minimum wage for 18- to 20-year-olds under Prime Minister Keir Starmer's government, while wider economic uncertainty is also making businesses more cautious about programmes that can take three to six years to complete.

Trust Electric Heating, a Leeds-based radiator manufacturer with 55 employees, says it has put further degree apprenticeship hiring on hold after previously bringing in four young people through the schemes and supporting three more still in training. Managing director Fiona Conor says the company values the model because apprentices often stay after qualifying, but added that the increased cost now makes further recruitment too risky.

Pickerings Lifts, which employs 600 people and has hired 13 degree apprentices over several years, is also becoming more reluctant to add school-leavers. Director Kiran Fothergill says the cost of employing a younger worker has risen by a fifth since the 2025 Budget, adding that preserving resilience in the current economy is the priority for the Stockton-based business.

Policy push meets access and support challenges

Degree apprenticeships, introduced in 2015, remain one of the most sought-after training routes because they offer a university qualification and work experience without student debt. Their popularity is illustrated by JPMorgan Chase's finance degree apprenticeship with the University of Exeter, which drew more than 9,000 applications for 100 places last year.

Yet access challenges extend beyond recruitment numbers. Some families say apprentices who need to move city for work receive less support with accommodation than first-year university students, increasing the burden on school-leavers who are also adapting to a full-time job and academic study. A parent of one London-based candidate on JPMorgan's Bournemouth programme says the relocation requirement and first-year banking exams created significant stress, although JPMorgan says it remains committed to the scheme and has not reduced apprentice hiring.

Andy Burnham is seeking to improve technical education and boost work prospects for nearly 1 million young people not in education, employment or training. Robert Halfon, a former skills minister and now executive director of manufacturing body Make UK, says degree apprenticeships could help address skills shortages and widen access to employment, but argues that red tape, higher employment costs and the risk of trained workers being poached are holding employers back.

The Department for Work and Pensions says businesses already receive significant tax breaks, including a national insurance exemption for apprentices under 25, and that public funding is being prioritised for those at the start of their working lives. The government also says it plans to support more than 22,000 new apprenticeships a year in professional sectors for under-25s, alongside 40,000 annual construction placements, with small and medium-sized businesses eligible for incentive payments of £2,000 a year for each apprenticeship.

In our earlier article on the benefits of early-career job-hopping, we reviewed research showing that switching jobs is a major driver of wage growth for young workers and can help them find stronger long-term matches. The piece also highlighted the tension between cultural skepticism about short tenures and evidence that mobility can improve pay progression and career stability—context that matters when employers weigh long, structured training commitments such as degree apprenticeships.

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