Changes to the Apprenticeship levy
In mid-December the government announced a series of changes that will have a significant impact on levy spending. What this means for schools:
Level 7 funding: Level 7 apprenticeships have ceased for starters over the age of 22.
Levy fund expiry shortened: From August, any unused levy funds will expire after 12 months, reduced from 24. This change will only apply to new funds entering accounts. Employers will need to more carefully plan their levy usage to avoid unspent funds being wasted.
Government top-up removed: The automatic 10% government top-up on monthly contributions is ending from August. This will mean levy pots will only be made up of the 0.5% levy contribution.
Increased co-investment: From August the co-investment share for additional training costs will rise from 5% to 25%. This means employers who exhaust their funds, and those accessing apprenticeship but not paying into the levy, will have to pay more.
No co-investment cost for under-25s: For small to medium sized employers (SMEs) there will be no co-investment costs for apprentices under-25s. Good news for those small trusts, and early years providers.
New flexibilities from April: Employers will be able to use levy funds more flexibly on short, modular training courses (known as “Apprenticeship Units”). These will first come in for critical skills areas and give providers the ability to create tailored, shorter duration training specifically for the education sector.
Summary Comparison Table
| Feature | Old Apprenticeship Levy | New Growth & Skills Levy (2026) |
| Fund Expiry | 24 months | 12 months |
| Flexibility | Full apprenticeships only | Modular “Apprenticeship Units” |
| Gov. Top-up | 10% monthly | 0% |
| SME Funding | 100% for 16–21s | 100% for 16–24s |
| Co-investment | 5% (if funds run out) | 25% (if funds run out) |
Opportunities to engage with Apprenticeships
