Changes to apprenticeship levy funding

Overview

From 1 August 2026, we are making changes to the apprenticeship funding system to ensure that levy balances are more closely aligned with our actual budget. 

From April 2026, you’ll also be able to use funds to pay for apprenticeship units.

These changes may affect how you plan and budget for training.

How funding works now

Each month, your apprenticeship service account receives notional funds based on your pay bill in England, this includes a 10% government top up.

When you pay for apprenticeship training, the oldest funds in your account are used first.

If you do not use the funds, they expire after 24 months.

What will change from 1 August 2026

How funds enter your account

• you will continue to receive levy funds each month based on your pay bill in England
• you will no longer receive the 10% government top-up on new funds entering your account 
• new funds entering your account will expire after 12 months if you do not use them

What happens to existing funds

• funds that entered your account on or before 31 July 2026 will continue to expire after 24 months
• the oldest funds will continue to be used first when paying for training

If you do not use all your levy each year

Your apprenticeship programme will continue as normal.

You may see the balance in your account reduce over time. You will continue to be able to offer apprenticeships and other growth and skills levy products.

If you use all your levy funds

If your levy funds run out, you pay part of the remaining training costs. This is known as co-investment.

The co-investment rate will change for new apprenticeships and apprenticeship unit starts from 1 August 2026.  

Employers will continue to benefit from the 95% rate of government co-investment for existing learners who started before 1 August (once their levy funds run out). 

Co-investment rates

When your levy funds run out, you will pay:

• 5% for apprenticeship starts up to and including 31 July 2026, with the government paying 95%
• 25% for apprenticeship starts from 1 August 2026, with the government paying 75%

Example: If you have an apprentice on a Post Production Technical Operator Level 4 apprenticeship with a £9,000 funding band and you have exhausted your levy funds:

Last updated on 16 March 2026 11:38