The apprenticeship landscape is changing for 2026–2027, with new apprenticeship funding rules, changes to employer contributions and new incentives for businesses recruiting apprentices.
For employers across England, understanding the latest apprenticeship funding changes for 2026/27 is important when planning recruitment, workforce development and apprenticeship programmes.
Whether you’re a levy-paying organisation, a small business or considering hiring your first apprentice, here’s what you need to know.
What are the apprenticeship changes for 2026/27?
The 2026–2027 apprenticeship funding year introduces several changes that could affect how employers pay for apprenticeship training.
The key changes include:
- Changes to funding for levy-paying employers when their funds run out
- Different funding arrangements for non-levy employers depending on apprentice age
- Changes to the Growth and Skills Levy
- Changes to how long levy funds remain available
- New incentives for eligible employers recruiting young apprentices
Understanding these changes can help your organisation plan ahead and make the most of apprenticeship funding.
Apprenticeship funding changes for employers
One of the most important areas to understand is how apprenticeship training will be funded depending on your organisation and the age of the apprentice.
Levy-paying employers
If your organisation pays the Apprenticeship Levy, you can use funds in your Apprenticeship Service account to pay for eligible apprenticeship training and assessment.
However, where a levy-paying employer does not have sufficient funds available, the employer contribution for eligible training and assessment costs is changing.
From 1 August 2026, where a levy-paying employer has insufficient funds, eligible apprentices aged 16–24 can be fully funded, while employers recruiting apprentices aged 25 and over contribute 25%, with the government funding the remaining 75%, subject to the relevant funding band maximum. See the latest apprenticeship funding guidance from the government for full eligibility requirements.
This means levy-paying employers should review their available funds and upcoming apprenticeship plans carefully.
Non-levy employers
For employers who do not pay the Apprenticeship Levy, funding arrangements depend on the apprentice’s age.
For eligible apprentices aged 16–24, the government can fund 100% of eligible apprenticeship training and assessment costs, up to the relevant funding band maximum. Employers can find more information about funding an apprenticeship as a non-levy employer.
For eligible apprentices aged 25 and over, employers are generally required to contribute 5%, with the government funding the remaining 95%, subject to the funding band maximum.
This could make apprenticeships an attractive way for smaller businesses to recruit and develop new talent.
Apprenticeship funding 2026/27: at a glance
| Employer type | Apprentice age | Government contribution | Employer contribution |
| Levy-paying employer with insufficient funds | 16–24 | 100% | 0% |
| Levy-paying employer with insufficient funds | 25+ | 75% | 25% |
| Non-levy employer | 16–24 | 100% | 0% |
| Non-levy employer | 25+ | 95% | 5% |
Funding is subject to eligibility requirements and the maximum funding available for the relevant apprenticeship standard. For the full details, see the government’s apprenticeship funding rules for 2026/27.
What is changing with the Growth and Skills Levy?
The Growth and Skills Levy provides employers with greater flexibility around how they use their apprenticeship funding.
However, there are important changes for 2026–2027.
From 1 August 2026, the automatic government top-up on new levy funds is being removed. New levy funds will also have a shorter lifespan, with funds entering an employer’s account from 1 August 2026 expiring after 12 months rather than 24 months.
This makes it increasingly important for levy-paying organisations to plan how they will use their funding.
Employers could use their apprenticeship funding to support:
- New talent and early careers
- Existing employee development
- Leadership and management skills
- Digital skills
- Business and customer service
- Creative and technical roles
- Sustainability and ESG
- Future workforce skills
Can employers transfer apprenticeship levy funds?
Yes. Levy-paying employers can transfer a proportion of their available apprenticeship funds to another employer.
This can be particularly useful for organisations that have more apprenticeship funding available than they currently need.
Transferring funds can also help businesses within a supply chain, sector or local community create apprenticeship opportunities.
For employers with unused levy funds, it’s worth considering whether transferring funding could help another organisation develop its workforce while supporting wider skills development.
Apprenticeship incentives for employers in 2026/27
There are also new financial incentives designed to encourage employers to recruit younger apprentices.
From October 2026, eligible non-levy-paying employers can receive an incentive of up to £2,000 when recruiting an eligible apprentice aged 16–24. Find out more about the £2,000 apprenticeship hiring payment and eligibility requirements.
Employers may also be eligible for a £3,000 Youth Jobs Grant when recruiting an eligible 18–24-year-old who has been unemployed and receiving Universal Credit for six months or more. More information is available in the government’s Growth and Skills Levy reforms guidance.
For employers considering hiring a young person, these incentives could provide additional financial support alongside the benefits of developing new talent within the organisation.
Why should employers hire an apprentice?
While funding is an important consideration, apprenticeships offer employers much more than financial support.
Build a skilled workforce
Apprentices develop practical skills while gaining experience in a real working environment, helping employers build talent that is relevant to their organisation.
Develop future talent
Apprenticeships provide a structured route for developing people at the beginning of their careers and can help organisations build a pipeline of future employees.
Upskill existing employees
Apprenticeships aren’t only for new recruits. Existing employees can also undertake an apprenticeship to develop new skills and progress within an organisation.
Address skills shortages
Developing talent internally can help businesses address skills gaps and prepare their workforce for changing industry requirements.
Bring fresh perspectives into your organisation
Apprentices can bring new ideas, digital skills and different perspectives to your organisation while learning from experienced colleagues.
What should employers do now?
With the 2026–2027 funding changes in place, employers should consider reviewing their apprenticeship strategy.
Start by asking:
Do we have unused apprenticeship funding?
Review your Apprenticeship Levy account and check when available funds are due to expire.
Which skills will our organisation need?
Consider your future workforce requirements, not just your current vacancies.
Could an apprenticeship fill a skills gap?
Look at the roles and departments where developing new talent could benefit your organisation.
Could we recruit a younger apprentice?
If you’re an eligible non-levy employer, the new funding arrangements and incentives could make this an attractive option.
Could we upskill our existing employees?
Consider whether an apprenticeship could support progression and development within your current workforce.
Find the right apprenticeship for your organisation
The 2026–2027 apprenticeship funding changes provide employers with an opportunity to review how apprenticeships can support their wider workforce strategy.
From business and customer service to creative, technical, digital, sport and sustainability roles, apprenticeships can help organisations develop the skills they need for the future.
At Access Industry, we work with employers to develop industry-ready talent through apprenticeship programmes designed around real workplace skills.
Whether you’re looking to recruit your first apprentice or expand an existing programme, our team can help you explore your options.
Ready to recruit an apprentice?
Find the right apprenticeship for your organisation and take the next step towards developing your future workforce.
Explore our apprenticeships or talk to our employer team today!
Funding rules, eligibility criteria and employer incentives can change. Always check the latest government apprenticeship funding guidance before making funding or recruitment decisions.
