Apprenticeship Funding Changes: What You Need to Know

A post by Skills for Security.

A major apprenticeship funding change is coming on 1st August 2026 and for some employers it could mean paying up to five times more towards apprenticeship training. 

The Government has confirmed that the employer co-investment rate for levy-paying employers who exhaust their levy funds will increase from 5% to 25%. This applies to apprentices starting from 1st August 2026. 

For a business recruiting 10 Fire Emergency and Security Systems Technician (FESST) apprentices, that could mean the difference between contributing £9,500 and £47,500 towards training costs. 

The good news? Employers still have time to act. 

Who Is Affected?

The change only affects levy-paying employers who use all the funds in their Apprenticeship Service account. 

If you regularly recruit apprentices or have previously exhausted your levy funds, this change could have a significant impact on future apprenticeship budgets. 

What Could It Cost?

Let’s look at a real example where an employer has exhausted their levy pot.

A FESST apprenticeship has a funding band of £19,000. 

Starts before 1st August 2026 – Employer contribution (5%) = £950 

Starts from 1st August 2026 – Employer contribution (25%) = £4,750 

Multiply that across a cohort of apprentices and the additional cost quickly becomes substantial. 

Three Things Employers Should Do Right Now

1. Review Planned Apprentice Starts

If you’re planning to recruit apprentices later this year, consider whether start dates can be brought forward before 1st August.  Apprentices who start before the funding change takes effect will remain on the current funding arrangements for the duration of their programme. 

2. Check Your Levy Position

Understanding how much levy funding remains available is now more important than ever. Employers that regularly exhaust their levy funds should assess the potential financial impact of the increased co-investment rate. 

3. Explore Levy Transfer Funding

Levy transfer funding could help offset future costs. Skills for Security is already working with employers, sponsors and industry partners to identify levy transfer opportunities that could support apprenticeship recruitment after August. 

Other Important Changes

The Government has also announced: 

• Levy funds will expire after 12 months instead of 24 months. 
• From 1st August 2026, the age threshold for non-levy employer co-investment will increase from 21 to 24, meaning that employers will only be required to pay the 5% co-investment contribution for apprentices aged 25 and over on their start date. This provides additional support for businesses recruiting younger apprentices and further reduces the cost of investing in new talent.

Need Help Understanding the Impact?

Our team is already helping employers assess their levy position and explore options before the new rules take effect. 

If you’d like to discuss how these changes could affect your recruitment plans, get in touch with us today.