As we approach the new financial and academic years, employers in England should be aware of several significant changes to Apprenticeship funding and levy rules that will impact workforce planning and training investment.
1. Fully Funded Apprenticeships for SMEs Hiring Under-25s
Small and medium-sized employers (non-levy payers) now benefit from fully funded training and assessment for apprentices aged 25 and under, eliminating the previous 5% co-investment charge. This significantly reduces barriers to hiring young talent and encourages early-career development.
2. Introduction of the New “Growth & Skills Levy” (Replacing the Apprenticeship Levy)
From April 2026, the Apprenticeship Levy will transition into the Growth & Skills Levy, which offers greater flexibility in how employers invest in skills-particularly through modular, shorter and more targeted training options.
3. Levy Funds Will Expire After 12 Months (Not 24)
From April 2026, unspent levy funds will now expire after 12 months, rather than the previous 24-month period. This accelerates the planning cycle and increases the urgency for employers to commit levy funds before they are reclaimed.
4. Removal of the 10% Government Levy Top-Up
The automatic 10% top-up that previously boosted levy-paying employers’ digital accounts has been removed, reducing the overall spending power available for apprenticeship training.
5. Higher Employer Co-Investment (25%) Once Levy Funds Run Out
When a levy-paying employer’s digital account balance is exhausted, the employer contribution for further apprenticeships increases to 25%, up from the previous 5%.
6. Apprentice Minimum Wage Increase & NIC Savings
From April 2026, the apprentice minimum wage will rise to £8.00 per hour, up from £7.55. Employers are also reminded that apprentices under 25 earning below £50,270 per year remain exempt from employer National Insurance contributions, offering substantial annual savings for businesses recruiting or upskilling young staff.
With these changes on the horizon, now is a great time for employers to invest in Apprenticeships, both to recruit new talent and to upskill existing employees, ensuring your organisation remains agile, competitive and future-ready.
Contact the Business Partnership Team at Windsor Forest Colleges Group to explore apprenticeship and upskilling opportunities.
