Prime Minister Andy Burnham and Work and Pensions Secretary Pat McFadden have confirmed that families on Universal Credit will receive an extra £4,500 per year if their children take up apprenticeships. The new bursary, set to roll out from August, is designed to compensate for a welfare system quirk that could otherwise leave households facing a net loss of around £80 per week.
Bursary Details and Rationale
The policy targets a specific gap in the benefits system: when a teenager aged 16–18 begins an apprenticeship, the child element of Universal Credit—worth approximately £340 per week—can be withdrawn. The apprentice salary, typically £258 per week, is lower than the lost benefit, leaving families worse off. The new bursary, at roughly £4,500 annually, bridges that shortfall. According to ministers, the measure is particularly aimed at single parents and families with a disabled child, who are most likely to be affected.
Apprenticeship Creation and Business Grants
Alongside the bursary, the government will provide £8,000 grants to small and medium-sized businesses that take on apprentices. Mr Burnham said the combined package is part of a broader plan to create 50,000 new apprenticeships, preventing school leavers from falling into a cycle of long-term benefit dependency. “I cannot accept the situation where we have so many young people in their 20s on benefits – it’s just not right for them,” Mr Burnham stated during a visit to Derby. “Why do we have that? The support just isn’t there.”
Ministerial Statements
Pat McFadden, the Work and Pensions Secretary, emphasised that the changes would ensure the welfare system acts as a “springboard to opportunity, not a barrier to it.” He added: “By providing bursaries to those who need them most and fully funding apprenticeship training, we are making sure cost is not the reason someone misses out.” Education Secretary Lucy Powell also commented: “Too many young people face unnecessary barriers to apprenticeships, college places and training. We’re investing to change that. This government is determined to help thousands more young people gain the skills, experience, and confidence they need to build successful careers.”
Impact on Universal Credit Households
The policy addresses a long-standing concern that the benefits system inadvertently penalises families when a teenager enters work-based training. Under current rules, the child component of Universal Credit stops when the young person starts earning above a threshold, which can make apprenticeships financially unattractive. By offering the bursary, the government aims to remove that disincentive and encourage more families to support apprenticeships. The DWP estimates that the measure will benefit tens of thousands of households annually.
The announcement follows the Labour government’s wider agenda to reform skills training and reduce youth unemployment. With 50,000 new apprenticeship places targeted, the package combines direct support for families with incentives for employers. Mr Burnham’s administration has positioned this as a key step toward building an “opportunity economy,” where no young person is held back by their family’s financial situation.
