Current Funding: Apprenticeship Levy Employers
- Who pays:
- Employers with a UK pay bill over £3 million pay the Apprenticeship Levy at 0.5% of their total payroll, with a £15,000 annual allowance.
- Accessing funds:
- Payments go into a Digital Apprenticeship Service account.
- Funds can be used for training and end-point assessment (EPA), up to the limit of the relevant funding band.
- Government top-up:
- Currently, the government adds a 10% top-up to monthly levy funds.
- Levy funds expire after 24 months from deposit.
- If funds deplete:
- Once levy funds are used, employers pay 5% of apprentice training costs, with the Government covering the remaining 95%.
Current Funding: Non-Levy Employers
- Eligibility:
- Employers below the £3 million threshold access co-investment funding.
- Co-investment split:
- Employer pays 5% of training and assessment costs; Government pays 95%, up to the funding band cap for apprentices aged 25 or over.
- 100% funding for some apprentices:
- Apprentices aged 16–21 (or 15 turning 16 between last Friday in June and 31 August).
- Aged 22–24 with an Education, Health & Care (EHCP) plan or care experience
- Payment process:
- Employers reserve funding via the Apprenticeship Service, pay providers directly, and arrange schedules.
- Levy fund transfers:
- Levy-paying employers can transfer up to 50% of unspent levy to support non-levy businesses.
Key Changes Announced in Autumn Budget 2025 (effective 2026)
- Removal of 10% levy top-up
- The government top-up for levy accounts will be abolished.
- Levy funds expiry shortened to 12 months
- Unspent funds will now expire after one year rather than two.
- Co-investment shifts after levy exhaustion
- Once levy funds deplete, the funding model changes to 75% Government / 25% employer contribution.
- Fully funded apprenticeships for under 25s (non-levy)
- Government will fully fund training and assessment for apprentices aged 24 and under (raised from the previous 22).
- Expansion of NI contributions exemption
- Employers pay no Class 1 National Insurance on earnings for apprentices under 25 earning up to £50,270.
New “Growth & Skills Levy” Framework (From April 2026)
- Transition overview:
- Apprenticeship Levy transitions into the Growth & Skills Levy, offering more flexibility across wider workforce training options (modular courses, upskilling, etc.)
- SME support:
- No employer contribution for apprentices under 25 at SMEs continues under the new system.
- Modular training “units” introduced:
- Allows shorter, targeted upskilling outside full apprenticeship standards. 50% of an employer’s levy can be utilised for upskilling and modular training, out with apprenticeships.
The Construction Industry Training Board (CITB) offers targeted apprenticeship funding to support construction employers:
- Apprenticeship attendance grant:
- £2,500 per year (paid in quarterly instalments) for Level 2 and above apprenticeship attendance
- Achievement grant:
- £3,500 upon successful completion of the apprenticeship standard
- Eligibility:
- Employers must be registered with CITB, compliant with levy returns, and use an approved apprenticeship provider. Funding covers core construction apprenticeship standards in England, Wales, and Scotland.
Get in touch
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