View from the top: Covéa’s Lisa Meigh on the changing attitudes towards apprenticeships

I can’t help feeling we’re witnessing a shift in attitudes towards apprenticeships that reminds me of the Aldi and Lidl phenomena. The snobbery that once existed towards these budget options has long been replaced with the pride of the savvy consumer who knows when they’ve got good value. Can kudos and competition for apprenticeships gain parity with university degrees and banish old thinking, and snobbery, to history?

It’s looking increasingly likely. At every school and college careers event we attended in 2022, we were inundated with students wanting to discuss apprenticeship routes. It feels like the tide has turned and young people now know there is a credible alternative to the traditional higher education routes. There’s particularly strong interest in higher level apprenticeships – those at level six and seven – equivalent to an undergraduate or master’s degree.

Families across the financial spectrum are no doubt questioning if university really does makes financial sense.

Statistics released this month show an annual 10.3% increase in higher level apprenticeship starts in 2021/22, and there’s been a fourfold increase over four years.

More pressure on this trend will come later this year with massive changes to the student loan system taking effect in September. The new loan has a maximum term of 40 years, with repayments starting when earnings exceed £25,000 per annum. This compares with 30 years and £27,295 respectively for students who started in September 2022. As a result, it is estimated that 52% of those on the new 2023 plan will repay their loan in full, compared with 19% on the current 2022 plan.

If that doesn’t focus the mind, university students living away also face the prospect of high living costs, a shortage of decent housing, and exorbitant and rising rents. Families across the financial spectrum are no doubt questioning if university really does makes financial sense. Lecturer strikes, increased use of remote learning and low contact hours for some courses might also be factors weighing on their decision. Indeed, a recent poll by the UPP Foundation and HEPI found that 71% think the cost-of-living crisis will deter people from going to university over the next two years, 32% of 18–24-year-olds think a university degree is a waste of time and 58% of respondents agreed that university degrees do not prepare students for the real world.

In reviewing their options, students should soon find it much easier. From this autumn, UCAS will be advertising apprenticeship opportunities on its website alongside degrees and, from autumn 2024, students should also be able to submit and manage applications both for apprenticeships and university courses through the UCAS platform. It’s a big step towards creating parity, but will it work?

Much depends on employers creating the right opportunities. For larger firms like ours who pay the mandatory apprenticeship levy there’s considerable scope and influence. For example, since the levy introduction, we’ve set up 30 different programmes within our business to help to attract, train and retain people with the skills both they and we need to succeed. We’ve also been able to use the levy to help create schemes that address diversity, putting into action our wider commitment to diversity, equality and inclusion within the insurance industry.

Companies not large enough to pay the levy can still tap into levy funding through a centrally managed pot.

It’s also worth noting that companies not large enough to pay the levy can still tap into levy funding through a centrally managed pot, where levy paying companies can make available their unspent levy for transfer to smaller organisations and enterprises. For example, one of our brokers is offering three Chartered Manager degree apprenticeships funded by Covéa and, since October 2021 when the transfer scheme was launched, we’ve contributed significantly to enable other businesses to fund apprenticeships. Since the levy operates on a ‘use it or lose it’ system, it makes sense for levy paying employers to have a clear strategy for maximising the impact of these substantial funds.

Beyond our own industry, the levy provides the ability for levy paying businesses to make choices to support smaller employers in regions with skills shortages that can hold back communities. For example, as part of our commitment to give back to our local communities, we’re funding Early Years Practitioner apprenticeships that help ensure the provision of high-quality childcare, which helps our community and indirectly benefits the families of our employees.

It’s clear the potential is huge, and I’d stick my neck out to say that higher level apprenticeships could offer the best opportunity for our young people in a generation. As employers, it’s up to us to figure out the best way to fulfil this.