Households on universal credit are set to receive new financial support to encourage teenagers into apprenticeships.
Ministers believe the new bursary will help to discourage young people from applying for apprenticeships for fear their families might lose out on benefits.
The government says the bursary will provide up to £4,500 annually per household.
The Social Security Advisory Committee has previously warned of an “apprenticeship cliff-edge”, with the current benefit system “unintentionally penalising families when their children pursue apprenticeships”.
A single parent with a disabled child could lose up to £339.92 a week in benefits if their teenager began an apprenticeship, the committee previously highlighted.
Even with weekly earnings of £258, the household would still face a net loss of around £80.
Work and pensions secretary Pat McFadden said the welfare system “should be 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.”
Mr McFadden elsewhere told The Guardian newspaper that “there is an expectation that people engage with the support”, when it is brought in.
The bursary will be funded through the growth and skills levy, paid for by employers whose annual pay bill is more than £3m.
Small and medium-sized enterprises will also have access to financial support worth up to £8,000 for hiring young apprentices, ministers have announced.
“This is a serious investment in the next generation and in the future of our economy,” Mr McFadden said.
Education secretary Lucy Powell said: “Too many young people face unnecessary barriers to apprenticeships, college places and training.
“We’re investing to change that.
Meeting apprentices in Derby with @Andyburnham this morning.
— Pat McFadden (@patmcfaddenmp) July 28, 2026
We want more young people to have the chance to learn technical subjects from the age of 14 to take advantage of the jobs of the future.
Now… where did my hi-vis get to…? pic.twitter.com/xSo6XiwLci
“This government is determined to help thousands more young people gain the skills, experience and confidence they need to build successful careers.
“The jobs of the future are already being created and it’s our job to ensure that every young person, wherever they live and whatever their background, has the skills and support they need to succeed.”
Lucy Schonegevel, from the charity Action for Children, described the announcement as a “welcome step”.
She said her charity’s youth employability teams “see young people turn down opportunities because they can’t risk a reduction in their family’s income”.
She added: “We hope this change will mean fewer young people have to choose between their future and their family’s ability to put food on the table.”
Ms Schonegevel said she hoped the government would “build on this balanced approach” when it responds to a review by Alan Milburn, the former health secretary who is looking at why around one in eight young people aged between 16 and 24 are neither in education nor work.
The announcement followed a pledge by prime minister Andy Burnham “to get the number of young people who are not in education, employment and training down”.
In Derby on Tuesday, Mr Burnham said: “I cannot accept the situation where we have so many young people in their twenties on benefits.
“It’s just not right for them.
“And why do we have that? The support just isn’t there.”
The prime minister unveiled plans to open up new technical education routes to 14-year-olds, which will be put on an equal footing with traditional academic pathways.
From Year 10, pupils will be able to combine core academic subjects, such as English and maths, with technical education linked to jobs available in their area.
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