Summary of Apprenticeship Levy & Funding Reforms – What is Changing and When

Name & Purpose: Apprenticeship Levy → Growth & Skills Levy

• From April/August 2026, the existing Apprenticeship Levy will be re-branded and re-worked as the Growth & Skills Levy — widening the range of training it can fund
• *In-development* Employers will be able to spend funds on shorter, modular “apprenticeship units” as well as traditional apprenticeships

Timing: Key Implementation Dates

Immediate / Already in Effect

• Small and medium sized employers (non-levy payers) now receive 100% government funding for apprentices aged under 25 — removing any co-investment contribution

August 2025

• New apprenticeship funding rules apply to all new starts, including:
  • Up to £2,000 employer incentive for eligible foundation apprenticeships 
• Foundation apprenticeships launch for 16–21-year-olds (and some 22–24-year-olds with EHCP/care leavers) 

 January 2026 – Funding Focus Shifts

• Funding support for Level 7 (master’s-level) apprenticeships changes:
  • Government funding for new Level 7 apprentices aged 22 or older will be withdrawn from 1 January 2026, except for:
    • those aged 16–21,
    • care leavers or those with an Education, Health & Care Plan (EHCP) under 25
• Existing Level 7 apprentices started before January 2026 continue to be funded to completion

Mitigation Funding

• A targeting mitigation fund was introduced to help maintain continuity of Level 7 apprenticeship access in specified healthcare professions
  • Advanced Clinical Practitioner
  • Specialist Community Public Health Nurse
  • District Nurse (Community Specialist Practice)
  • Clinical Associate in Psychology
  • Population Health Intelligence Specialist

 April 2026

• Apprentice minimum wage increase: rises to around £8/hour (affects all employers and apprentices) 

From August 2026

The major Growth & Skills Levy reforms are expected to apply broadly from this point:

• Shorter apprenticeship units become available – Employers can use funds for modular training outside full apprenticeships
• Levy funds will expire after 12 months, down from 24 months 
• 10% government top-up removed — Employers will only have access to the money they pay in 
• Higher co-investment once levy funds are exhausted — Employers pay 25% of training costs (from a previously more generous structure)

Other Important Changes

• Relaxed English & Maths requirements for apprentices aged 19+, giving employers more flexibility
• No requirement to extend apprenticeships for part-time learners, simplifying planning for employers

High-Level Rationale

The broad thrust of reforms is to:

• Refocus levy spending toward younger and early-career talent
• Expand modular and flexible training pathways
• Improve value for money by adjusting funding incentives and timing rules