From 1 April 2026, several updates to apprenticeship funding and contributions will come into effect for new starters. Below is an overview of the key changes:
Changes for non-levy paying employers (employers with an annual pay bill of less than £3million):
Fully funded apprenticeships for those aged 24 or under
From April 2026, apprentices aged 24 or under working for non-levy employers will have their training fully funded by the Department for Education (DfE). This means the usual 5% employer contribution will no longer apply.
Changes for levy paying employers (employers with an annual pay bill of more than £3million):
The current Apprenticeship Levy will be replaced by a new “Skills and Growth Levy.”
Under this new system, funds will be able to support a broader range of training, not just apprenticeships. While full details have not yet been confirmed, further guidance is expected on what types of training will be included and we will update our website when we know more.
Shorter timescale to use levy funds
At present, levy funds must be used within 24 months from the month they are paid in. However, from April 2026, this timeframe will reduce to 12 months. Any unused funds after this period will return to central government. In addition, the current 10% government top-up on levy contributions will be removed.
Increased contributions after levy funds are used
Currently, organisations contribute 5% of monthly training costs once their levy funds are spent, with the remaining 95% covered by the DfE. From April 2026, this contribution will increase to 25%, with the DfE funding the remaining 75%.
Additional information for all employers
Increase to the National Minimum Wage (NMW) for Apprentices
The National Minimum Wage for Apprentices will rise from £7.55 to £8.00 per hour. This rate applies to apprentices under 18, and apprentices aged 19 and over in the first year of their apprenticeship.*
Incentive payments for apprentices aged 16-18
The £1,000 incentive payment available to employers who recruit apprentices aged 16 to 18 will remain in place. This payment is made in two instalments:
- £500 after the apprentice has been on programme for 90 days
- £500 after the apprentice has been on programme for 365 days
Overall, the 2026 updates introduce both increased flexibility and new considerations.
- Apprenticeships may become more accessible for younger people, particularly in smaller organisations
- Funding systems will allow for a wider range of training options
- Financial planning will become more important due to shorter funding windows and higher contributions in some cases
Apprenticeships remain a valuable pathway for building skills and supporting career development. As these changes take place, it’s useful to stay informed and consider how they may shape future opportunities.
If you’re an employer thinking about how apprenticeships can work for your business, or you have any questions about the changes, please don’t hesitate to request a call back here.