Will the 2026 JIB Pay Rise Improve Recruitment and Apprenticeships?
- Technical review: Thomas Jevons (Head of Training, 20+ years)
- Employability review: Joshua Jarvis (Placement Manager)
- Editorial review: Jessica Gilbert (Marketing Editorial Team)
- Last reviewed:
- Changes: Initial publication analyzing 2026 JIB Industrial Determination 2026-2028 impact on electrician recruitment and apprenticeship pipelines using causal mechanism framework, real-terms purchasing power calculations, SME cost pressure assessment, adult apprentice National Living Wage gap analysis, and evidence-graded scenario modeling
The 2026 JIB Industrial Determination delivers a 3.95% pay increase for graded electrical operatives and 2% for apprentices, effective 5 January 2026, as the first stage of a three-year wage agreement negotiated between the Electrical Contractors’ Association and Unite the Union. Industry forums, trade publications, and apprenticeship providers frequently assert that “higher pay will solve skills shortages” or “better wages will fix apprenticeship completion problems,” creating expectation that this pay rise will materially improve electrician recruitment and increase apprenticeship starts and completions across England, Wales, and Northern Ireland.
However, the relationship between wage increases and workforce pipeline outcomes is not straightforward or automatic. Pay rises operate through specific causal mechanisms – attraction (drawing new entrants to the trade), retention (reducing churn to competing sectors), and progression incentives (encouraging qualification completion). Each mechanism faces counter-effects including employer cost constraints, substitution to non-JIB labour, and structural barriers in training systems that wage increases cannot directly address. Understanding whether the 2026 pay rise will actually improve recruitment and apprenticeships requires distinguishing between what pay can realistically influence (relative attractiveness compared to agency work or other trades, income security for retention) and what it cannot fix (NVQ portfolio completion barriers, AM2 assessment capacity constraints, SME training place affordability, adult apprentice household income requirements).
This article systematically examines the evidence on whether the 2026 JIB pay rise is likely to improve electrician recruitment and apprenticeship outcomes by analyzing real-terms purchasing power gains, comparing JIB rates with competing earning opportunities, assessing apprentice wage adequacy against living costs and National Living Wage requirements, identifying structural bottlenecks that pay cannot address, and modeling three scenarios (best case, base case, worst case) for 2026-2027 workforce pipeline outcomes. For electricians and employers planning qualification pathways from initial electrical training through NVQ Level 3, AM2 assessment, and JIB Gold Card employment, understanding realistic expectations from wage increases versus broader training system improvements affects career timing decisions, employer apprentice intake planning, and training provider capacity allocation far more than headline percentage figures alone.
What the 2026 JIB Pay Rise Actually Is
The 2026 JIB pay rise refers to the JIB Industrial Determination 2026-2028, a multi-year wage agreement negotiated through collective bargaining between the Electrical Contractors’ Association (representing employers) and Unite the Union (representing workers) covering electrical operatives in England, Wales, and Northern Ireland. Scotland operates under a separate but aligned Scottish Joint Industry Board (SJIB) with its own determination, though typically following similar percentage structures.
Coverage and Effective Date
Effective: Monday 5 January 2026
Applies to: Graded operatives (Electrician, Approved Electrician, Technician, Labourer) and apprentices (Stages 1-4) employed under JIB National Working Rules
Excludes: Self-employed electricians, agency workers not on JIB contracts, NICEIC/NAPIT registered sole traders operating outside JIB signatory firms
Rate categories: National rates (Transport Provided and Own Transport variants), London/Inner Zone rates (approximately 12% premium over National), Shop Employed rates (workshop-based roles)
Headline Increases
Graded operatives: 3.95% increase applied to all hourly base rates for Electrician through Technician grades
Apprentices: 2% increase applied to all four apprentice stage rates
Allowances: Sick pay increases deferred to 2028 implementation (weeks 3-24 rising by £10/week, weeks 25-52 rising by £5/week)
Context: This follows a 5% increase in January 2025 and a 7% increase in January 2024, making this the third consecutive year of above-inflation nominal increases following the 2022-2023 period where JIB rates fell behind inflation substantially.
2026 JIB Rates (National, Transport Provided)
| Grade | 2025 Rate (£/hr) | 2026 Rate (£/hr) | Weekly (37.5h) | Annual (52wks) |
| Technician | £21.50 | £22.35 | £838.13 | £43,582 |
| Approved Electrician | £20.25 | £21.05 | £789.38 | £41,047 |
| Electrician | £18.82 | £19.56 | £733.50 | £38,142 |
| Apprentice Stage 4 | £13.76 | £14.03 | £526.13 | £27,359 |
| Apprentice Stage 3 | £13.05 | £13.31 | £499.13 | £25,954 |
| Apprentice Stage 2 | £10.60 | £10.81 | £405.38 | £21,080 |
| Apprentice Stage 1 | £8.16 | £8.32 | £312.00 | £16,224 |
Note on London rates: London/Inner Zone rates typically run 12% higher than National rates (e.g., Approved Electrician London £23.58/hour vs £21.05 National) to compensate for M25 area living costs, though exact 2026 London figures were not fully confirmed in primary JIB sources at time of analysis.
Note on Electrician rate discrepancy: The 2025 Electrician rate shown (£18.82) reflects corrections from earlier source inconsistencies where some publications listed £18.11. Using £18.82 as baseline, 3.95% increase yields £19.56 for 2026.
What These Rates Include and Exclude
Included in base rates:
Standard 37.5-hour working week pay
Employer National Insurance contributions
Employer pension contributions (minimum 3% rising to higher levels in many agreements)
Entitlement to paid holiday (typically 30+ days including bank holidays)
JIB sick pay scheme access
Death in service insurance
Employment protections (notice periods, redundancy rights, grievance procedures)
Excluded from base rates (paid separately):
Overtime premiums (time-and-a-half after 37.5 hours, double-time Sundays/bank holidays)
Travel allowances and mileage reimbursement
Lodging allowances for distant site work (maximum £51.29/night)
Site-specific premiums and bonuses
Tool allowances where applicable
Shift premiums for night or rotating shift work
Understanding this distinction is critical: the £21.05/hour Approved Electrician rate represents the minimum guaranteed base hourly wage, not total earnings. Electricians working 45-50 hour weeks with regular overtime and travel allowances typically earn 20-30% above base annual calculations.
Real-Terms Context: Is This a Meaningful Pay Rise?
Understanding whether the 2026 JIB pay rise materially improves electrician living standards and workforce attractiveness requires distinguishing between nominal increases (the percentage figure announced) and real-terms gains (purchasing power improvement after accounting for inflation).
Why Inflation Matters for Pay Assessment
Wages are paid in pounds sterling, but what matters to workers is purchasing power: how many hours of work are required to afford rent, food, energy, transport, and household costs. When wages increase by 3.95% but the cost of goods and services increases by 2.5%, the real purchasing power gain is only approximately 1.45% – the difference between wage growth and inflation. This real-terms calculation determines whether electricians feel materially better off or simply maintaining their standard of living against rising costs.
The Consumer Prices Index including owner occupiers’ housing costs (CPIH) is the most comprehensive UK inflation measure, capturing housing costs (rent, mortgage interest, council tax), energy bills, food, transport, and services. CPIH better reflects electrician household budget pressures than CPI (which excludes housing costs) or RPI (which overstates inflation due to methodological flaws). For 2026, Office for Budget Responsibility forecasts and Bank of England projections place CPIH inflation at approximately 2.1-2.5% for January-to-January comparison.
Thomas Jevons, Head of Training at Elec Training, explains the practical implications:
"When we tell learners the 2026 rate increases, they hear '3.95% pay rise' and think that's their spending power improvement. But inflation matters. If CPIH runs at 2.5% in 2026, that 3.95% increase delivers roughly 1.45% real purchasing power gain - enough to feel slightly better off, not transformational. For apprentices getting 2%, they're actually going backwards in real terms if inflation exceeds their pay rise, which makes household budgeting harder during training years."
Real Purchasing Power Calculations (2026)
Graded operatives (3.95% increase):
Nominal wage growth: 3.95%
CPIH inflation (projected): 2.5%
Real purchasing power gain: ~1.45%
Interpretation: Modest but genuine improvement in living standards. Electricians can afford slightly more after accounting for cost increases, marking the third consecutive year of real-terms gains after 2022-2023 erosion.
Apprentices (2% increase):
Nominal wage growth: 2%
CPIH inflation (projected): 2.5%
Real purchasing power change: -0.5%
Interpretation: Real-terms pay cut. Apprentices’ wages fail to keep pace with rising costs, meaning their household budgets become tighter during training years despite nominal wage increase.
Historical Context: Recovery After 2022-2023 Erosion
The 2026 pay rise continues the corrective phase following substantial purchasing power losses during 2022-2023 when inflation spiked (CPIH peaked at 9.2% in late 2022) while JIB increases lagged at 4-5%. Combined analysis across 2024-2026:
2024: 7% increase vs ~4% inflation = ~3% real gain
2025: 5% increase vs ~3% inflation = ~2% real gain
2026: 3.95% increase vs ~2.5% inflation = ~1.45% real gain
Cumulative 2024-2026: Approximately 6.5% real purchasing power recovery
This restores electricians approximately to 2021 purchasing power levels but does not deliver transformational income improvements beyond inflation compensation. The pattern reflects correction rather than sustained real wage growth.
Why Apprentice Pay Lags Behind
The 2% apprentice increase falls below both operative rates (3.95%) and projected inflation (2.5%), creating real-terms erosion for trainees. This differential reflects:
Bargaining priorities: Union negotiations typically prioritize qualified operative rates that affect the largest membership segment
Completion incentives: Back-loading pay improvements to qualified grades encourages apprentices to complete qualifications quickly to access better rates
Employer cost management: Smaller apprentice increases reduce total wage bill growth for SMEs training multiple apprentices
Market positioning: Apprentice rates primarily compete with entry-level work in other sectors (retail, hospitality, warehousing) rather than skilled trade rates
However, this approach creates tension with adult apprentice recruitment (examined in detail below) where household income requirements and National Living Wage legislation make low apprentice rates financially prohibitive for career changers aged 21+.
Recruitment Impact: What Pay Can and Cannot Fix
Whether the 2026 JIB pay rise improves electrician recruitment depends on understanding specific causal mechanisms through which wages affect workforce supply, competitive positioning against alternative employment options, and structural bottlenecks that pay increases cannot address.
The Causal Mechanisms: How Pay Affects Recruitment
Mechanism 1 – Attraction: Higher JIB rates increase the trade’s appeal to potential entrants (school leavers, career changers, workers in other trades) by improving expected lifetime earnings and career progression pathways. If electrician wages rise faster than plumber, carpenter, or HVAC technician wages, the relative attractiveness of electrical work increases, potentially drawing entrants away from competing trades.
Mechanism 2 – Retention: Higher rates reduce churn from JIB employed roles to agency work, self-employment, or exit from the trade entirely. Electricians currently earning JIB rates who are considering agency day rates or domestic self-employment may remain in JIB employment if the pay gap narrows or if total package value (including benefits) compensates for lower headline rates.
Mechanism 3 – Re-entry: Improved rates may attract electricians who left the trade or moved to non-electrical work back into active electrical employment, expanding the qualified workforce without requiring new training pipelines.
JIB Rates as Floor, Not Ceiling
The critical context for recruitment impact assessment: JIB rates represent minimum wages for signatory contractors, not market ceiling rates. Many electrical contractors, particularly in high-demand sectors (data centres, renewable energy, industrial automation), pay above JIB minimums to attract and retain experienced electricians.
Competitive landscape in 2026:
JIB Approved Electrician: £21.05/hour base (£41,047 annual) plus benefits
Agency day rates: £300-350/day (approximately £27-30/hour equivalent) for commercial/industrial work
CIS subcontractor rates: £25-35/hour typical range for project-based engagement
Domestic self-employed: £40-60/hour charge-out (net profit £22-30/hour after overheads for typical utilisation)
The 3.95% JIB increase narrows the gap between JIB base rates and agency/CIS alternatives but does not eliminate it. An agency electrician earning £320/day (£41,600 gross for 130 days worked after holidays/gaps) still shows higher headline income than JIB Approved (£41,047), though like-for-like comparison must factor in benefits value (holiday pay, sick pay, pension) worth approximately £6,000-8,000 annually that agency workers lack.
Evidence on Prior Pay Rises and Recruitment Outcomes
Historical pattern (2024-2025): JIB delivered 7% (2024) and 5% (2025) increases, substantially above inflation and the largest consecutive increases in JIB history. However, industry surveys and vacancy data show:
ECA member surveys: 37% of electrical contractors report ongoing difficulty recruiting qualified electricians despite higher wages, citing skills shortages as growth barrier
ONS vacancy data: Electrical construction sector vacancies remained elevated through 2024-2025, with fill rates not materially improving post-wage increases
Industry feedback: Recruitment challenges persist due to limited qualified workforce supply rather than wage unattractiveness
Interpretation: Pay rises help with retention (reducing outflow to agency work) but cannot create qualified electricians who don’t exist in the pipeline. The bottleneck is workforce supply (number of Gold Card holders available) rather than demand-side wage competitiveness.
Where Pay Matters: The Sick Pay Advantage
One area where JIB rates deliver genuine retention benefit: employment security and sick pay provision. JIB sick pay schemes provide £210-220/week (weeks 3-24) and £100-105/week (weeks 25-52) during illness or injury, plus statutory sick pay for the first two weeks. This contrasts sharply with:
Self-employed electricians: Zero income during illness (must self-insure or accept income loss)
Agency workers: Minimal or zero sick pay depending on umbrella company terms
CIS subcontractors: Zero sick pay (entirely self-funded during illness)
For electricians with family financial responsibilities, health concerns, or those approaching middle age where injury risk and recovery time increase, the guaranteed sick pay provision of JIB employment offers substantial value beyond headline hourly rates. This becomes increasingly important as electricians age: a 45-year-old electrician with a mortgage and dependents values income security during illness far more than a 25-year-old single electrician prioritizing maximum gross earnings.
The 2028 sick pay increase (£10/week for weeks 3-24, £5/week for weeks 25-52) strengthens this advantage, though deferred implementation reduces immediate 2026 recruitment impact.
What Pay Cannot Fix: Structural Supply Bottlenecks
Higher JIB wages do not address core recruitment constraints:
Limited Gold Card holder supply: The number of electricians qualified to Approved Electrician standard with valid JIB Gold Cards is fundamentally limited by historical apprenticeship completions and AM2 pass rates, not by wage levels. Increasing JIB rates from £21.05 to £25/hour would not create additional qualified electricians unless it incentivized higher apprenticeship completion rates or AM2 re-attempts.
Retirement outflow: Electricians retiring from the workforce (estimated 3-5% annually) exceed new qualifier inflow regardless of wage levels, creating net workforce shrinkage that pay alone cannot reverse.
Geographic distribution: Shortages are often regional (London, South-East, Scotland) rather than national. JIB rates apply nationally (with London premium), but local labour shortages reflect regional project pipelines and housing costs more than wage differentials.
Qualification pathway duration: Converting an unqualified person into a JIB Approved Electrician requires minimum 18 months to 4 years depending on pathway (fast-track NVQ vs traditional apprenticeship). Pay improvements in 2026 cannot produce qualified electricians before 2027-2028 at earliest.
Evidence-Based Recruitment Verdict
Likely outcome: Marginal improvement, not structural fix
Positive factors:
✅ 3.95% increase maintains JIB competitiveness with agency rates for retention-focused electricians
✅ Real-terms gain (1.45%) after inflation slightly improves living standards
✅ Sick pay provision strengthens retention advantage for family-focused electricians
✅ Narrowing gap with CIS rates reduces churn incentive
Limiting factors:
❌ Supply bottleneck (limited qualified workforce) not addressed by pay increases
❌ Prior 7%/5% increases (2024-2025) did not produce measurable recruitment surges
❌ Retirement outflow exceeds qualifier inflow regardless of wages
❌ Agency rates still exceed JIB by £5-10/hour gross, maintaining pay differential
Confidence level: Medium. Pay helps with retention but cannot create workforce supply. Best-case scenario: 5-10% reduction in electrician churn to agency work. Recruitment supply remains constrained by apprenticeship completion rates examined below.
Apprenticeships: Where the Pay Rise Falls Short
Apprenticeship start and completion rates represent the primary pipeline for electrician workforce supply, yet the 2026 JIB pay rise – particularly the 2% apprentice increase – is unlikely to materially improve either metric due to structural constraints, inadequate adult apprentice wage levels, and cost pressures on SME training providers.
Why Apprentice Pay Is Not the Main Bottleneck
Apprenticeship completion problems in UK electrical training stem primarily from non-financial barriers:
Portfolio evidence gathering: NVQ Level 3 electrical installation requires extensive documented site work across multiple units (installation, testing, fault-finding, inspection). Apprentices struggle to access sufficient varied work to complete portfolios, particularly in small firms with limited project diversity. Pay increases do not create additional site opportunities or varied project exposure.
AM2 assessment capacity and pass rates: The AM2/AM2E practical assessment is mandatory for Approved Electrician status and represents significant failure barrier (estimated 20-30% fail first attempt). Assessment centre capacity limits throughput; pay increases do not expand testing facility availability or improve preparation quality.
Site access consistency: Apprentices require regular, sustained site hours to build competence and portfolio evidence. Economic downturns, project delays, or employer business fluctuations create gaps in site access that extend completion timelines regardless of wage levels.
Work-life balance for adult apprentices: Adult career changers (25-40 years old) with family responsibilities struggle to balance apprenticeship site hours, evening portfolio work, college attendance, and household obligations. Higher pay helps but does not eliminate time constraints.
Supervision and mentorship quality: Completion depends on experienced electricians providing mentorship, portfolio guidance, and skill development on site. Pay increases to apprentices do not improve mentor availability or quality.
The Adult Apprentice Problem: National Living Wage Gap
The most significant pay-related barrier to apprenticeship expansion: JIB apprentice rates fall far below National Living Wage requirements for workers aged 21+, creating legal top-up obligations that make adult apprentices expensive for employers.
National Living Wage (April 2026): £12.71/hour for workers aged 21+
JIB apprentice rates (January 2026):
Stage 1 (Year 1): £8.32/hour
Stage 2 (Year 2): £10.81/hour
Stage 3 (Year 3): £13.31/hour
Stage 4 (Year 4): £14.03/hour
Legal requirement: Employers must pay whichever is higher – the apprentice minimum wage OR the National Living Wage once workers turn 21. For adult apprentices aged 21+, employers must top up to £12.71/hour regardless of JIB apprentice stage.
Financial impact for employers:
Stage 1 adult apprentice:
JIB rate: £8.32/hour
NLW requirement: £12.71/hour
Top-up cost: £4.39/hour (53% premium)
Annual top-up: £8,559 additional cost
Stage 2 adult apprentice:
JIB rate: £10.81/hour
NLW requirement: £12.71/hour
Top-up cost: £1.90/hour (18% premium)
Annual top-up: £3,705 additional cost
Stage 3 adult apprentice:
JIB rate: £13.31/hour (exceeds NLW)
No top-up required
For SME electrical contractors training on tight profit margins, the £8,559 annual top-up cost for a Stage 1 adult apprentice (age 25 career changer, for example) represents substantial additional expenditure beyond planned apprentice wage budget. This economic barrier directly suppresses adult apprentice recruitment, limiting the trade’s ability to attract career changers and mature entrants who bring life experience and motivation but require household-supporting wages.
The 2% apprentice increase (£8.16 to £8.32 for Stage 1, £10.60 to £10.81 for Stage 2) provides zero relief from this adult apprentice cost pressure. The NLW rises faster than JIB apprentice rates (NLW increased 6.7% April 2025-2026), widening the gap and making adult apprentices progressively more expensive for employers each year.
Apprentice Household Income Adequacy
Beyond legal NLW requirements, apprentice wages must support household costs to enable training completion without financial withdrawal. Assessment of wage adequacy:
Stage 1 apprentice (£8.32/hour, £16,224 annual):
Below Universal Credit thresholds for independent households
Insufficient for independent living in most UK regions
Requires family financial support or partner income
Viable for: 16-18 year olds living with parents, limited financial obligations
Stage 2 apprentice (£10.81/hour, £21,080 annual):
Below median UK individual income (£31,866 ONS 2024)
Insufficient for family support, mortgage payments, or child-rearing costs
Represents significant income reduction for career changers from most previous employment
Viable for: Young adults with low housing costs, no dependents
Stage 3 apprentice (£13.31/hour, £25,954 annual):
Approaching UK median individual income
Marginally viable for household formation in lower-cost regions
Still represents income sacrifice for most career changers
Viable for: Adults with established households, partner income contribution
Stage 4 apprentice (£14.03/hour, £27,359 annual):
Slightly exceeds UK median individual income
Viable for independent household in most UK regions outside London/South-East
Comparable to entry-level professional salaries
Viable for: Most demographics without dependents
The 2% increase adds approximately £350-400 annually across stages, which does not materially change household budget viability calculations for potential adult apprentices weighing career change decisions.
Completion Incentives vs Start Barriers
The JIB wage structure deliberately back-loads pay improvements to create completion incentives:
Completion incentive mechanism: An apprentice completing NVQ Level 3 and AM2 in late 2025/early 2026 immediately jumps from Stage 4 (£14.03/hour, £27,359 annual) to Electrician grade (£19.56/hour, £38,142 annual) – a £10,783 annual increase (39.4% pay rise) upon qualification. This substantial wage jump rewards completion and incentivizes rapid progression.
However, this back-loaded structure creates front-end barriers to adult apprentice recruitment. Career changers in their late 20s or 30s evaluate Year 1 apprentice wages (£16,224) against current income and household obligations, often concluding the income sacrifice is financially impossible regardless of Year 4 completion prospects.
SME Cost Pressures and Apprentice Place Capacity
SME electrical contractors provide approximately 80% of UK apprentice training places. The 2026 pay determination increases total labour costs for these employers through:
JIB wage increases:
Graded operatives: 3.95% increase adds ~£800-1,000 annually per electrician
Apprentices: 2% increase adds ~£300-500 annually per apprentice
Employer National Insurance increases (April 2025):
NI rate increased from 13.8% to 15%
NI threshold reduced from £9,100 to £5,000
Combined effect: ~£700-900 additional cost per employee annually
Apprenticeship Levy (unchanged):
0.5% of payroll for companies with £3m+ payroll
Most SMEs exempt, but larger firms face ongoing levy costs
Fixed apprenticeship funding band:
Electrotechnical apprenticeship funding: £18,000 per completion
Funding has not increased with inflation
Real-value erosion: £18,000 in 2018 equivalent to approximately £21,000 in 2026 pounds
Aggregate effect: SME electrical contractors face 5-7% total employment cost increases (wages + NI) without corresponding increase in revenue or apprenticeship funding support. Rational business responses include:
Reducing apprentice intake from 2-3 starts per year to 1 start
Delaying apprentice recruitment until existing apprentices complete
Increasing apprentice-to-qualified-electrician supervision ratios (potentially reducing training quality)
Substituting toward agency labour or CIS subcontractors to avoid permanent payroll costs
Evidence-Based Apprenticeship Verdict
Likely outcome: Unlikely to improve starts; may stabilize completions
Why starts unlikely to improve:
❌ 2% increase below inflation creates real-terms apprentice pay erosion
❌ Adult apprentice NLW gap widens (top-up costs increase as NLW grows 6.7% vs 2% JIB apprentice rates)
❌ SME cost pressures (wage + NI increases) reduce financial capacity for new apprentice places
❌ Household income inadequacy unchanged (Stage 1-2 wages remain insufficient for independent living)
❌ Prior 2024-2025 increases produced no measurable apprenticeship start surge
Why completions may stabilize:
✅ Substantial completion wage jump (£14.03 to £19.56 = £10,783 annual increase) maintains incentive
✅ Modest operative gains reduce qualified electrician exits that eliminate apprentice supervision
✅ Real-terms stability (even with -0.5% apprentice erosion) prevents severe completion withdrawals
Confidence level: High for starts assessment (structural barriers clearly limit impact), Medium for completions (influenced by non-pay factors like AM2 capacity).
What would change this verdict:
Skills England intervention raising apprenticeship funding band from £18,000 to £22,000+
JIB apprentice rate realignment to match or exceed National Living Wage for all stages
Apprenticeship Levy reforms allowing SME access to levy funds for training costs
Statutory changes creating adult apprentice wage subsidy or tax relief for employers
SME Reality and Cost Pressure
Small and medium-sized electrical contractors (SMEs with 1-50 employees) provide the majority of UK apprentice training places and employ most JIB graded operatives, making SME business economics central to understanding workforce pipeline impacts from the 2026 pay determination.
SME Share of Electrical Training
Apprentice training concentration: Approximately 80% of electrical apprenticeships occur in SME firms rather than large contractors, reflecting the industry’s predominantly small-business structure
JIB employment concentration: Most JIB signatory contractors are SMEs serving regional commercial, industrial, and domestic markets rather than national infrastructure projects
Training capacity implications: SME financial health and cost management directly determine apprentice intake numbers, supervision quality, and completion support
Combined Cost Pressures Facing SMEs (2026)
SME electrical contractors face multiple simultaneous cost increases effective 2025-2026:
JIB wage determination:
Graded operatives: 3.95% increase
Apprentices: 2% increase
Impact: ~£800-1,000 additional cost per qualified electrician annually, ~£300-500 per apprentice
Employer National Insurance changes (April 2025):
Rate increase: 13.8% to 15% (+1.2 percentage points)
Threshold reduction: £9,100 to £5,000 annually
Impact: ~£700-900 additional cost per employee annually
Aggregate: 5-7% total employment cost increase (wages + NI combined)
Fixed revenue constraints:
Construction sector growth flat to slightly negative (2024-2025 industry surveys)
Project delays and volatile pricing reported by 63% of ECA member firms
Limited ability to pass wage increases through to client pricing in competitive tendering
Apprenticeship funding static:
£18,000 funding band unchanged despite inflation
Real value erosion: ~15% loss in purchasing power since 2018 introduction
Gap between training costs and funding reimbursement widens
Joshua Jarvis, Elec Training’s Placement Manager, explains employer decision-making under cost pressure:
"When JIB labour costs increase, some contractors respond by substituting to agency or CIS workers who aren't on JIB terms. That shifts costs from permanent payroll to variable labour, but it reduces the employer's incentive to train apprentices. Agency electricians don't typically supervise apprentices; they're brought in for specific project needs and released when the work ends. If more contractors move toward that model to manage costs, the training pipeline shrinks even as headline pay rates increase."
Rational SME Responses to Cost Increases
SME electrical contractors operating on typical 8-15% net profit margins must absorb or offset 5-7% employment cost increases to maintain profitability. Observed business responses:
Response 1 – Reduce permanent headcount:
Maintain core qualified electrician team
Use agency or CIS workers for project peaks
Effect: Reduced apprentice supervision capacity, fewer training places offered
Response 2 – Delay apprentice intake:
Wait for existing apprentices to complete before recruiting new starts
Reduce intake from 2-3 per year to 1 per year
Effect: Training pipeline throughput reduction of 30-50%
Response 3 – Increase apprentice-to-qualified ratios:
Shift from 1 apprentice per 2-3 qualified electricians to 1 per 1-2
Maximize apprentice labour value per supervision cost
Effect: Potentially reduced training quality, portfolio completion challenges from insufficient mentorship
Response 4 – Price increases to clients:
Increase tender prices 4-6% to cover wage and NI increases
Risk: Losing contracts to competitors holding prices, particularly in public sector work with fixed budgets
Effect: Potential revenue reduction if pricing power weak in local market
Response 5 – Productivity improvements:
Invest in tools, equipment, processes that increase output per electrician
Reduce non-billable time through scheduling efficiency
Effect: Theoretically offsets costs but requires capital investment and management capacity often limited in SMEs
Not all responses are equally feasible or chosen by all firms, but aggregate effect across SME sector: reduced capacity for new apprentice intake and potential substitution toward non-JIB labour to manage cost pressures.
Infrastructure Project Opportunities vs SME Access
Best-case scenario for absorbing wage increases: strong infrastructure demand (data centres, renewable energy, EV charging networks) creates project pipeline that enables contractors to pass costs through to clients and maintain margins despite higher wages.
However, infrastructure projects typically flow to large national contractors (Balfour Beatty, Wates, NG Bailey) rather than regional SMEs. SMEs serve:
Local commercial fit-outs (offices, retail, hospitality)
Industrial maintenance contracts
Residential development electrical work
Domestic and light commercial installations
These markets face different demand dynamics than infrastructure mega-projects, often with tighter margins and price sensitivity that limits cost pass-through ability.
Implication: Infrastructure boom scenario benefits large contractors more than SME training providers, potentially widening the gap between sectors best positioned to absorb wage increases and sectors providing majority of apprentice places.
Scenarios for 2026
Rather than single-point predictions, workforce pipeline outcomes from the 2026 JIB pay determination depend on interactions between pay effects, employer responses, economic conditions, and policy interventions, suggesting scenario-based assessment.
Best Case Scenario: Infrastructure Demand Absorbs Costs
Conditions:
Data centre construction boom and renewable energy infrastructure projects sustain electrical contractor demand
Clients accept 4-6% price increases to accommodate wage and NI cost growth
Construction sector growth accelerates to 2-3% annually
Immigration policy stabilizes (no further restrictions on skilled electrician entry)
Skills England funding reforms increase apprenticeship support
Recruitment outcomes:
JIB retention improves 10-15% as security and sick pay advantages reduce agency churn
Vacancy fill rates improve modestly (5-10%) but shortages persist due to retirement outflow
Some electricians return from self-employment to JIB roles valuing stability over maximum earnings
Geographic rebalancing as London premium attracts electricians from lower-cost regions
Apprenticeship outcomes:
Starts increase 10-15% driven by employer confidence and project pipeline visibility
Completions improve 5-10% as firms invest in mentorship and portfolio support
Adult apprentice share reaches 35% if employers absorb NLW top-up costs anticipating long-term qualified electrician shortages
AM2 pass rates improve slightly (60-65%) from increased preparation resourcing
Aggregate workforce impact:
Net workforce growth 2-3% annually (qualifications exceed retirements)
Skills shortage intensity reduces from “severe” to “moderate”
JIB signatory firms increase market share relative to non-JIB contractors
Probability assessment: Low (20-25%). Requires multiple favorable conditions aligning simultaneously without economic headwinds.
Base Case Scenario: Steady State with Modest Gains
Conditions:
Construction sector growth remains flat to 1% annually
Inflation stabilizes at 2-2.5% as forecast
Employers pass through some costs (2-3% price increases) but absorb remainder
No major policy interventions or funding reforms
Immigration restrictions maintain current levels
Recruitment outcomes:
JIB retention improves marginally (3-5%) among family-focused electricians valuing sick pay
Vacancy rates remain elevated but stabilize (no further deterioration)
Churn to agency work continues but at slightly reduced rate
Geographic shortages persist, particularly London and South-East
Apprenticeship outcomes:
Starts remain flat or decline 5% as SMEs cautiously maintain existing training commitments without expansion
Completions stable at 55-60% national rates
Adult apprentice share stagnates at 25-30% due to unresolved NLW gap and household income barriers
AM2 capacity constraints continue limiting throughput
Aggregate workforce impact:
Net workforce growth minimal (0-1% annually)
Skills shortage intensity remains “severe” in high-demand regions
Training pipeline insufficient to offset retirement outflow
Gradual workforce aging as insufficient new qualifier influx
Probability assessment: High (50-60%). Represents continuation of current trajectory with marginal pay-driven improvements insufficient to transform pipeline dynamics.
Worst Case Scenario: Cost Pressures Reduce Training
Conditions:
Construction slowdown accelerates (0 to -1% growth) due to interest rate impacts on development
Inflation exceeds forecasts (3-4% CPIH) eroding real wage gains
SMEs face profit margin compression from inability to pass costs to price-sensitive clients
Employer NI increases compound wage cost pressures
No policy support or funding reforms
Recruitment outcomes:
JIB employed headcount declines 5-10% as contractors substitute toward agency labour
Vacancy rates increase as fewer electricians available for permanent employment
Churn to self-employment accelerates among younger electricians chasing higher gross earnings
Brain drain to Australia, Canada, UAE accelerates among qualified electricians seeking higher wages
Apprenticeship outcomes:
Starts decline 15-20% as SMEs reduce or pause apprentice intake due to cost-benefit unfavorability
Completions decline to 50-55% as reduced supervision quality and site access constraints worsen
Adult apprentice recruitment effectively ceases due to NLW gap making them financially prohibitive
AM2 failure rates increase (35-40%) as preparation time compressed by business pressures
Aggregate workforce impact:
Net workforce decline 2-3% annually (retirement outflow exceeds qualification inflow)
Skills shortage intensity increases to “critical” across all UK regions
JIB market share declines as signatory firms reduce permanent employment
Training pipeline collapse risk if SME apprentice capacity withdraws significantly
Probability assessment: Moderate (25-30%). Requires economic headwinds and policy inaction coinciding, but not implausible given construction sector volatility.
Final Evidence-Graded Verdict
Based on causal mechanism analysis, historical evidence from prior pay rises, structural barrier assessment, and SME economic realities, the 2026 JIB pay determination is likely to produce differentiated outcomes for recruitment versus apprenticeships.
Recruitment: Possibly Improves (Medium Confidence)
Verdict: Marginal improvement likely, not structural transformation
Supporting evidence:
3.95% operative increase delivers genuine real-terms gain (~1.45%) after inflation
Narrowing gap with agency rates (from ~£8/hour to ~£6/hour differential) reduces churn incentive
Sick pay provision advantage strengthens retention value for family-focused electricians
Real-terms recovery continues three-year pattern (2024-2026) rebuilding purchasing power after 2022-2023 erosion
Limiting evidence:
Prior 7%/5% increases (2024-2025) produced no measurable recruitment surge in industry surveys
Vacancy rates remain elevated despite larger percentage increases than 2026 offer
Workforce supply bottleneck (limited Gold Card holders) not addressed by pay rises
Retirement outflow exceeds qualifier inflow regardless of wage competitiveness
Confidence justification: Medium confidence reflects tension between theoretical retention benefits (pay competitiveness improving) and empirical evidence (prior increases showed limited recruitment impact). Improvement likely but magnitude uncertain and limited by supply constraints.
Expected magnitude: 3-5% reduction in electrician churn from JIB employment to agency/self-employment. Insufficient to close skills gaps but stabilizes existing workforce.
Apprenticeships: Unlikely to Improve (High Confidence)
Verdict: Starts unlikely to increase; completions may stabilize
Supporting evidence against improvement:
2% apprentice increase below 2.5% inflation creates real-terms pay erosion
Adult apprentice NLW gap widens as NLW grows 6.7% while JIB apprentice rates grow 2%
SME cost pressures (wages + NI) reduce financial capacity for new apprentice places
Household income adequacy unchanged (Stage 1-2 wages still insufficient for independent living)
Non-pay barriers (portfolio evidence, AM2 capacity, site access) unaddressed by wage increases
Supporting evidence for completion stabilization:
Substantial wage jump upon completion (£14.03 to £19.56 = £10,783 annually) maintains incentive
Real-terms operative gains reduce qualified electrician exits that eliminate apprentice supervision
Back-loaded pay structure continues rewarding completion over withdrawal
Confidence justification: High confidence reflects clear evidence that 2% increase insufficient to address adult apprentice cost barriers, household income requirements, or structural completion obstacles. Prior increases showed no apprenticeship start surge.
Expected magnitude: Starts decline 0-5% or remain flat. Completions stable at 55-60% national rates. Adult apprentice share stagnates at 25-30%.
What Would Change These Verdicts
Policy interventions that could improve outcomes:
For apprenticeships:
Skills England increasing electrotechnical apprenticeship funding band from £18,000 to £22,000-25,000
JIB apprentice rate realignment matching or exceeding National Living Wage for all stages (eliminating adult apprentice top-up requirements)
Apprenticeship Levy reform allowing SME access to levy funds currently held by large employers
Adult apprentice wage subsidy or employer tax relief for first two years of training
Statutory AM2 capacity expansion through additional assessment centres and examiner training
For recruitment:
Immigration policy changes allowing skilled electrician entry on shortage occupation visa routes
Large-scale apprenticeship start increase (requiring funding and employer incentives) producing qualifier pipeline growth in 3-5 years
Retirement age extension through career longevity programs keeping experienced electricians active longer
Accelerated qualification pathways for adjacent trades (HVAC, plumbing) with transferable skills
Economic conditions:
Infrastructure investment boom (data centres, renewable energy, EV networks) creating sustained contractor demand enabling cost pass-through
Construction sector growth acceleration to 3-4% annually supporting apprentice intake expansion
Inflation decline below 2% enlarging real wage gains and improving household budget adequacy
Monitoring indicators for 2026-2027:
ECA member surveys on apprentice intake plans (quarterly)
ONS vacancy data for electrical construction roles (monthly)
DfE apprenticeship starts data for electrotechnical frameworks (annual, reported with lag)
JIB membership statistics tracking signatory contractor numbers (annual)
AM2 assessment throughput and pass rates from awarding bodies (annual)
Summary Table: Evidence-Graded Outcomes
| Outcome | Verdict | Confidence | Key Reason |
| Recruitment | Possibly improves | Medium | Narrowing gap with agency rates helps retention, but prior increases showed limited impact and supply bottleneck persists |
| Apprentice Starts | Unlikely to improve | High | 2% rise below inflation, adult apprentice NLW gap widens, SME cost pressures reduce capacity |
| Apprentice Completions | May stabilize | Medium | Substantial completion wage jump maintains incentive, but non-pay barriers (portfolio, AM2) unaddressed |
| Skills Shortage | Remains severe | High | Pay alone cannot create qualified workforce supply faster than retirement outflow |
The 2026 JIB Industrial Determination delivers a 3.95% pay increase for graded electrical operatives and 2% for apprentices as part of a three-year wage agreement, continuing the corrective phase following substantial purchasing power erosion during the 2022-2023 inflation spike. Electricians planning qualification pathways from NVQ Level 3 electrical training through AM2 assessment to JIB Gold Card employment should understand realistic workforce impacts from this pay determination rather than assuming “higher pay automatically fixes skills shortages” or “apprenticeship problems are mainly about wages.”
The evidence-based assessment reveals differentiated outcomes: recruitment possibly improves through marginal retention gains as the pay differential between JIB employed roles and agency work narrows from approximately £8/hour to £6/hour, strengthening the employment security and sick pay advantages of JIB contracts for family-focused electricians who value income stability during illness or injury over maximum gross earnings. However, recruitment improvement remains limited by fundamental workforce supply constraints where the number of qualified Gold Card holders available for employment is determined by apprenticeship completions and AM2 pass rates from 3-5 years prior, not by current wage competitiveness. Prior large increases of 7% (2024) and 5% (2025) produced no measurable recruitment surge in ECA member surveys or ONS vacancy data, suggesting pay helps with retention but cannot create qualified electricians who don’t exist in the pipeline.
Apprenticeship outcomes appear less favorable: the 2% apprentice increase falls below projected 2.5% inflation, creating real-terms wage erosion that worsens household budget adequacy during training years precisely when career changers aged 25-40 with family responsibilities evaluate whether apprentice wages of £16,224 (Stage 1) to £27,359 (Stage 4) can sustain independent living or family formation. More critically, the adult apprentice National Living Wage gap widens as NLW grows 6.7% (£11.44 to £12.71) while JIB apprentice rates grow only 2%, increasing the legal top-up requirement that employers must pay for apprentices aged 21+ from £4.11/hour (£8,014 annually) to £4.39/hour (£8,559 annually) for Stage 1 apprentices, making adult career changers progressively more expensive for SME electrical contractors already facing combined cost pressures from the 3.95% operative wage increase and Employer National Insurance changes (15% rate, £5,000 threshold) effective April 2025.
SME electrical contractors providing approximately 80% of UK apprentice training places face rational economic pressures that may reduce training capacity: 5-7% total employment cost increases without corresponding revenue growth in flat construction markets, fixed apprenticeship funding at £18,000 per completion that hasn’t increased with inflation since 2018, and project delay reports from 63% of ECA member firms creating uncertainty about sustained work pipeline to support apprentice supervision. Observed responses include substituting toward agency or CIS labour to shift costs from permanent payroll to variable expenses, reducing apprentice intake from 2-3 starts annually to 1 start, delaying recruitment until existing apprentices complete, and increasing apprentice-to-qualified-electrician ratios that potentially compromise supervision quality and portfolio completion support.
Apprenticeship completion problems stem primarily from non-financial structural barriers that wage increases cannot address: NVQ Level 3 portfolio evidence gathering requires varied site work across multiple units (installation, testing, fault-finding, inspection) that small firms with limited project diversity struggle to provide regardless of apprentice pay levels, AM2 practical assessment capacity limits throughput and represents significant failure barrier with estimated 20-30% fail rates on first attempts, site access consistency depends on economic conditions and project pipelines rather than wage competitiveness, and work-life balance challenges for adult apprentices balancing site hours with evening portfolio work and family responsibilities are not resolved by modest pay increases. The substantial wage jump upon completion from Stage 4 (£14.03/hour, £27,359 annual) to qualified Electrician (£19.56/hour, £38,142 annual) – a £10,783 annual increase or 39.4% pay rise – maintains strong completion incentives, but this back-loaded structure creates front-end recruitment barriers for adult entrants who evaluate Year 1-2 wages against household obligations.
Scenario modeling suggests base case outcome as most probable (50-60% likelihood): recruitment improves marginally through 3-5% reduction in electrician churn to agency work, apprenticeship starts remain flat or decline 0-5%, completions stabilize at 55-60% national rates, net workforce growth minimal at 0-1% annually, and skills shortage intensity remains severe particularly in London, South-East, and Scotland regions with elevated vacancy rates. Best case scenario (20-25% likelihood) requires infrastructure demand boom absorbing wage costs through client price acceptance and Skills England funding reforms enabling SME training expansion, potentially delivering 10-15% recruitment improvement and 10-15% apprenticeship start increases. Worst case scenario (25-30% likelihood) reflects construction slowdown and SME training contraction producing 5-10% JIB headcount decline, 15-20% apprenticeship start reduction, and 2-3% annual net workforce decline accelerating skills shortage crisis.
The critical finding for workforce planning: the 2026 JIB pay determination is a necessary but insufficient intervention that maintains real-terms wage recovery trajectory and strengthens retention advantages through employment security provisions but cannot resolve fundamental supply bottlenecks in electrician qualification pipelines without complementary policy interventions including apprenticeship funding increases, adult apprentice wage subsidies or NLW realignment, AM2 capacity expansion, and immigration policy reforms allowing skilled electrician entry on shortage occupation routes. Electricians entering training now through NVQ Level 3 pathways will encounter a labour market in 2026-2027 where skills shortages persist, JIB wages provide modest purchasing power gains and strong employment security benefits, but overall workforce supply remains constrained by training system capacity limitations that pay alone cannot fix.
Call us on 0330 822 5337 to discuss how the 2026 JIB wage determination affects your career planning decisions, whether to pursue electrical training now given projected workforce demand, how NVQ Level 3 qualification pathways integrate with JIB employment opportunities versus self-employment options, and what realistic income expectations look like for newly qualified electricians entering the market in 2026-2027. Our in-house recruitment team works with 120+ partner contractors to secure placements for NVQ learners, providing practical guidance on workforce entry strategies that account for both wage competitiveness and structural pipeline constraints rather than headline percentage figures alone.
References
- JIB (Joint Industry Board for the Electrical Contracting Industry) – New Wage Agreement from 2026 to 2028 – https://www.jib.org.uk/news/new-wage-agreement-from-2026-to-2028/
- JIB – Industrial Determination 062025 (2026-2028 Wage Structure) – https://www.jib.org.uk/wp-content/uploads/2025/06/JIB-Industrial-Determination-062025.pdf
- Department for Education – Apprenticeships Statistics 2024-25 – https://explore-education-statistics.service.gov.uk/find-statistics/apprenticeships/2024-25
- ONS (Office for National Statistics) – Annual Survey of Hours and Earnings 2025 – https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2025
- ECA (Electrical Contractors’ Association) – Industry Survey Shows Growth Remains Flat as Skill Shortages and Volatile Pricing Persist (March 2025) – https://www.eca.co.uk/news/2025/mar/industry-survey-shows-growth-remains-flat-as-skill-shortages-and-volatile-pricing-persist
- GOV.UK – Apprenticeship End-Point Assessments Statistical Report March 2023 to February 2024 – https://www.gov.uk/government/publications/apprenticeship-end-point-assessments-statistical-report-march-2023-to-february-2024/apprenticeship-end-point-assessments-statistical-report-march-2023-to-february-2024
- Department for Business and Trade – Estimating the Impact of the Apprentice Rate on Apprenticeship Starts (2017) – https://assets.publishing.service.gov.uk/media/5a82b334ed915d74e6237311/Frontier_Estimating_the_impact_of_the_Apprentice_Rate_NQ_FINAL_2017_Report.pdf
- LSE Business Review – Do Apprenticeships Increase Earnings? (2018) – https://blogs.lse.ac.uk/businessreview/2018/03/20/do-apprenticeships-increase-earnings/
- ECA – Survey: Electrical Businesses Brace for Project Delays in 2025 (November 2024) – https://www.eca.co.uk/news/2024/nov/survey-electrical-businesses-brace-for-project-delays-in-2025
- Enlit – UK Electricians Shortage a Barrier to Net Zero Goals, Finds ECA – https://www.enlit.world/library/uk-electricians-shortage-a-barrier-to-net-zero-goals-finds-eca
- UK Parliament – Research Briefing: Apprenticeships Policy in England – https://dera.ioe.ac.uk/id/eprint/40997/1/CDP-2024-0174.pdf
- ONS – Consumer Price Inflation January 2025 – https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/january2025
- Office for Budget Responsibility – The Economy Forecast: Inflation – https://obr.uk/forecasts-in-depth/the-economy-forecast/inflation/
Note on Accuracy and Updates
Last reviewed: 23 December 2025. This page is maintained; we correct errors and refresh sources as JIB Industrial Determinations, economic forecasts, apprenticeship statistics, and labour market data are updated. Pay rates based on confirmed JIB Industrial Determination 062025 effective 6 January 2026. Real-terms calculations use OBR/Bank of England CPIH forecasts of 2.5% for 2026 with acknowledgment that actual inflation may vary. National Living Wage figure (£12.71/hour) reflects confirmed April 2026 rate from Low Pay Commission recommendations. Adult apprentice top-up calculations assume 21+ workers requiring NLW compliance per National Minimum Wage regulations. SME cost analysis includes Employer National Insurance changes (15% rate, £5,000 threshold) effective April 2025 from Autumn Budget 2024. Apprenticeship funding band (£18,000) reflects current published maximum for electrotechnical frameworks ST0152. Scenario probability assessments represent analytical judgment based on construction sector trends, policy trajectory, and economic forecasts rather than statistical modeling. Recruitment and apprenticeship impact verdicts reflect causal mechanism analysis, historical evidence from 2024-2025 pay rises, and structural barrier assessment. Monitoring indicators track ECA surveys, ONS vacancy data, DfE apprenticeship statistics, and JIB membership reports for empirical validation of predictions. Next review scheduled following publication of 2026-2027 apprenticeship starts data (expected October 2026) and ECA Q1 2026 member survey results on recruitment and training decisions post-wage determination implementation.
