Apprenticeship funding changed on 1 August. For many smaller employers, the training is now free.
- HRNews
- 5 days ago
- 2 min read
What is it?
New apprenticeship funding rules apply in England to apprenticeships starting between 1 August 2026 and 31 July 2027. Oversight now sits with the Department for Work and Pensions. The rules change most years, and the ones that apply to each apprentice are the rules in force on their start date.
The main changes from 1 August 2026:
Where an employer does not pay the apprenticeship levy and the apprentice is aged 16 to 24 at the start of training, government funds all the training and assessment costs, up to the funding band maximum.
Where that apprentice is 25 or over, government contributes 95 per cent and the employer pays 5 per cent.
Levy payers who exhaust their funds now also get full funding for apprentices aged 16 to 24, following a further announcement in mid 2026. For apprentices aged 25 or over, government contributes 75 per cent and the employer pays 25 per cent, up from 5 per cent.
The automatic 10 per cent top up to levy funds has gone. New funds entering levy accounts from August 2026 now expire after 12 months rather than 24.
From 1 October 2026, employers who do not pay the levy can claim a hiring payment of up to £2,000, paid in instalments, for a new apprentice aged 16 to 24 who has not been employed by them for more than 90 days before the practical period starts.
That sits on top of the existing £1,000 payment for apprentices aged 16 to 18, and for those aged 19 to 24 who have been in care or have an education, health and care plan.
What does it mean for you?
If cost has been the thing holding you back, the sums have changed. For a pay bill under £3 million, training a 16 to 24 year old is now fully funded, with up to £2,000 on top from October. The wage is still yours to pay, and it is still the biggest cost.
The paperwork has not relaxed. England uses apprenticeship standards, and you need a written apprenticeship agreement covering the usual contractual terms, the off the job training hours, and the start date, duration and end date of the practical period as well as the whole apprenticeship. Apprentices in England and Wales have employee status and the employment rights that come with it.
Keep your PAYE details up to date in your apprenticeship service account, and work closely with your training provider.
How Lansbury HR can help.
We can draft the apprenticeship agreement, sense check your contracts, policies and induction, and make sure taking on an apprentice does not create a problem twelve months down the line.
Get in touch with the team at Lansbury HR.
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