The Apprenticeship Levy became the Growth and Skills Levy in April 2026. Large employers with a payroll of more than £3 million pay the Growth and Skills Levy.
The Levy is designed to make funding more flexible for employers, with the ability to use it across apprenticeships, foundation apprenticeships and new apprenticeship units that support critical skills areas such as digital, advanced AI and engineering.
If you have a payroll of more than £3 million:
- You can use your Growth and Skills Levy funds to train and assess your apprentices.
- Once your Levy funds for a given year run out, you must contribute 25% of the apprenticeship training costs for learners aged 25 and over, with the remaining 75% funded by the government. For learners aged 16–24, the government will fund 100% of the costs.
- From August 2026 onwards, you have 12 months from the point at which Levy funds enter your account to use them, after which they will expire.
- If you have unused Levy funds, you can transfer them to other employers who can use the funds for their apprenticeship training.
If you have a payroll of less than £3 million:
- Apprenticeships for 16–24-year-olds are fully funded by the government.
- For apprentices aged 25 and over, the government pays 95% of the apprenticeship training costs up to the funding band maximum.
The following financial incentives are available to employers recruiting young apprentices. These incentives are stackable.
- Employers do not pay National Insurance for apprentices under the age of 25 who earn less than £50,270 per year.
- £1,000 young apprentice payment:
- Apprentices must be 16–18 or 19–24 years old with an Education, Health and Care (EHC) plan or care leaver status.
- Available to Levy and non-Levy payers.
- Up to £2,000 foundation apprenticeship incentive:
- Apprentices must be 16–21 years old with an EHC plan, care leaver status or a custodial background.
- Only for foundation apprenticeships.
- Available to Levy and non-Levy payers
- £2,000 non-Levy hiring grant:
- Applies when a non-Levy paying employer recruits an apprentice aged 16–24.
- The apprentice must have joined the organisation within the previous three months before the apprenticeship start date.
- Youth Jobs Grant:
- Applies when an employer hires an 18–24-year-old who has been on universal credit and seeking work for six months or more.
- Available to Levy and non-Levy payers.
The government are streamlining their apprenticeship offer to maximise the amount of funding available for younger apprentices. This includes defunding apprenticeships that the government believe should be funded by the individual or employer.
From 1st September 2026, 16 standards have been defunded, with existing providers being given limits for apprenticeship starts in these areas until the defunding. This affects the following standards:
- Chartered Manager
- Cleaning Hygiene Operative
- Coaching Professional
- Custody and Detention Professional
- Facilities Management Supervisor
- Improvement Leader
- Improvement Practitioner
- Lead Practitioner in Adult Care
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- Learning and Skills Assessor
- Learning and Skills Mentor
- Operations Manager
- Outdoor Learning Specialist
- Professional Security Operative
- Public Sector Compliance Investigator and Officer
- Security First Line Manager
- Team Leader
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Government funding is no longer available for Level 7 apprenticeships for most learners aged 22+.