Recently, the UK Government announced some key changes to Apprenticeship Funding. Employers in England should be aware of these significant changes, as they may affect apprenticeship training investments as we progress throughout the year.

Growth & Skills Levy Will Replace the Apprenticeship Levy

From 2026, the system becomes more flexible and allows employers to fund a wider range of training, including modular learning and apprenticeship units.

Levy Funds Will Expire Faster – 12 Months Instead of 24

Employers will have only 12 months to use levy contributions before they expire, meaning unspent funds will be lost more quickly.

Co‑Investment Costs Increase to 25% When Levy Funds Run Out

When an employer’s levy pot is exhausted, their mandatory contribution rises from 5% to 25% towards training costs. Budgeting for skills development becomes more important, especially for organisations with growing training demand

Government 10% Levy Top‑Up Will Be Removed

Employers will no longer receive the monthly 10% top‑up to their levy funds. This reduces the total funding available and reinforces the need for efficient use of existing levy contributions.

Removal of Mandatory English & Maths Qualifications for Adults (19+)

Adult apprentices no longer need formal English and maths qualifications to complete their apprenticeship; competence can now be demonstrated through work‑based evidence. This reduces barriers to progression for capable adult learners

Increased Support for SMEs

SMEs that do not pay the levy now have 100% of training costs covered for apprentices aged under 25. This aims to expand early‑career apprenticeship opportunities