Apprenticeship changes from August 2026: 16–24s now 100% government funded
A significant set of reforms to apprenticeships in England took effect on 1 August 2026, with more still to come in October. The headline is a good one for employers: apprentices aged 16 to 24 are now fully funded by the government for most businesses. Below is a plain-English summary of what has changed and what it means for you.
The big one: under-25s are now 100% funded
For new starts from 1 August 2026, the government pays the entire cost of apprenticeship training and assessment (up to the funding band maximum) for apprentices aged 16 to 24. That applies whether or not you pay the apprenticeship levy. There is no employer contribution at all.
For apprentices aged 25 and over, the picture depends on your levy position — and this is where one rate has gone up. Here is the full picture:
| Your business | Apprentice aged 16–24 | Apprentice aged 25+ |
|---|---|---|
| Non-levy (payroll under £3m) | 100% funded — you pay £0 | 95% funded — you pay 5% |
| Levy payer, funds available | Paid from your levy pot | Paid from your levy pot |
| Levy payer, pot exhausted | 100% funded — you pay £0 | 75% funded — you pay 25% |
That last cell is the one to watch. If you are a levy payer and your pot runs dry, the employer contribution for an apprentice aged 25 or over has risen from 5% to 25%. Planning your levy spend now matters considerably more than it did.
Changes for levy-paying employers
- Funds now expire after 12 months, not 24. This applies to funds entering your account from August 2026 onwards. Anything already in your account before that date keeps the original 24-month expiry. In practice, the window to spend your levy has halved.
- The 10% government top-up has gone. New funds entering levy accounts from 1 August 2026 no longer receive it. Existing funds that already had the top-up applied are unaffected.
- Co-investment rises to 25% for new starts aged 25+ once your funds are exhausted, as above.
A £2,000 payment for hiring young apprentices
From October 2026, employers who do not pay the levy can claim a hiring payment of up to £2,000 when they take on a new apprentice aged 16 to 24. It is paid in two instalments, with the first due once the apprentice has completed their first 90 days. This sits on top of the training itself being fully funded.
Other changes worth knowing
- Shorter minimum duration. The minimum apprenticeship length dropped from 12 months to 8 months, giving far more flexibility on shorter programmes.
- Skills England is now in charge. Oversight has moved from the Institute for Apprenticeships and Technical Education (IfATE) to Skills England, bringing apprenticeships and wider skills policy under one roof.
- Assessment is being reformed. The single end-point assessment is gradually being replaced by assessment spread across the programme. This is happening in phases — standards whose assessment plans have not yet been revised still use end-point assessment, so check the position for your specific standard.
- A new Level 2 Administrative Assistant apprenticeship is available for starts from 1 August 2026, aimed specifically at 16–24-year-olds.
- Apprenticeship units have been introduced — short, flexible training modules designed to upskill existing staff in priority sectors without committing to a full apprenticeship.
- New pathways for 16–21-year-olds are being introduced in construction, engineering, software and data, and the skilled trades.
- Foundation apprenticeships remain available for young people aged 16 to 21 — and up to 24 for those with an Education, Health and Care Plan (EHCP), care leavers, and prison leavers.
What you should do now
If you have been putting off taking on an apprentice, the maths has changed in your favour — particularly for younger recruits, where the training is now free and a £2,000 payment follows from October. If you are a levy payer, the shorter expiry window and the jump to 25% co-investment both point the same way: plan your spend sooner rather than later.
Emma will go through your exact position with you, work out what you are entitled to, and map out the options. It is free and there is no obligation — just get in touch.
Source: Apprenticeship technical funding guide from August 2026 and the 2026 to 2027 funding rules summary of changes, GOV.UK. Figures correct at the time of writing — please confirm your own position with us before making decisions.