Apprenticeship Funding

How are apprenticeships funded?

Apprenticeships are funded through a combination of employer contributions and government funding. The funding available to your organisation depends on whether they pay the Growth and Skills Levy and the age and circumstances of the apprentice. 

All apprenticeships must follow an approved apprenticeship standard or unit and are subject to the government funding rules that apply at the time the apprenticeship starts. 

Each apprenticeship is assigned a funding band, which sets the maximum amount of government funding available for training and end-point assessment. Employers work with their chosen training provider to agree a training programme that meets the needs of the business and the apprentice. 

Growth and Skills Levy-paying Employers 

Employers with an annual pay bill of more than £3 million are required to contribute to the Growth and Skills Levy. 

Levy-paying employers can use funds held within their Digital Apprenticeship Service account to pay for approved apprenticeship training and assessment. 

• Contributions are calculated at 0.5% of an employer’s annual pay bill
• Funds can be used for approved apprenticeships and apprenticeship units through the Growth and Skills Levy
• New funds entering employer accounts from 1 August 2026 expire after 12 months if they are not used. Existing funds credited before that date continue under previous expiry arrangements

Find out more about the Growth and Skills Levy here:

Employers that do not pay the levy 

Employers with an annual pay bill below £3 million do not pay the Growth and Skills Levy. 

Government funding may cover some or all apprenticeship training costs, depending on the apprentice’s circumstances and the employer’s eligibility. 

Eligible employers can access fully funded apprenticeship training, up to the maximum funding band, for apprentices who: 

• Are aged 16 to 24 at the start of their apprenticeship
• Have an Education, Health and Care Plan (EHCP)
• Have previously been in local authority care

From 1^st August 2026, employers can access 100% government-funded training and assessment for eligible apprentices aged 16-24, even after their levy funds have been used up. 

For apprentices over 25, once available levy funds have been exhausted, apprenticeship training can continue through government co-investment. Employers generally contribute 25% of eligible training and assessment costs, with the government contributing the remaining 75%. 

How much will apprenticeship training cost my business? 

The cost to your organisation will depend on: 

• Whether you pay the Growth and Skills Levy
• The apprenticeship funding band
• The age and eligibility of the apprentice
• Whether sufficient levy funds remain in your digital account

If apprenticeship training costs exceed the maximum funding band, your organisation may be required to meet the additional costs. Any costs and payment arrangements will be agreed before training begins. 

Our Employer Engagement Team can help you understand the funding available and identify the most cost-effective solution for your business.

Funding bands 

Every apprenticeship standard is allocated to a funding band by the government. 

Funding bands determine the maximum amount available towards apprenticeship training and end-point assessment. 

For the latest funding band information, visit GOV.UK Apprenticeship Funding Bands. 

Additional support for young apprentices 

Government funding provides additional support for apprentices who are: 

• Aged 16 to 18 at the start of their apprenticeship
• Aged 19 to 24 with an Education, Health and Care Plan (EHCP)
• Aged 19 to 24 and previously in local authority care

This additional funding is provided directly by the government and does not come from an employer’s levy account. 

Recruiting younger apprentices can help businesses develop future talent while accessing available funding support. 

For more information about apprenticeship contribution fees please contact our engagement team on 01206 712043.

Apprentice Minimum Wage

All apprentices must be paid at least the applicable National Minimum Wage. 

From 1 April 2026, the apprentice rate is £8.00 per hour and applies to: 

• Apprentices aged under 19
• Apprentices aged 19 or over who are in the first year of their apprenticeship

Apprentices aged 19 or over who have completed the first year of their apprenticeship must receive at least the National Minimum Wage or National Living Wage rate applicable to their age. 

Minimum Wage Rates from April 2026 

These rates are for the National Living Wage (for those aged 21 and over) and the National Minimum Wage (for those of at least school leaving age). The rates change on 1st April every year.

Examples:

A 21-year-old apprentice in the first year of their apprenticeship must be paid at least £8.00 per hour. 

A 21-year-old apprentice who has completed their first year must be paid at least £12.71 per hour. 

Many employers choose to pay above the minimum rates to attract and retain talent. 

National Insurance Relief 

Employers do not pay Class 1 National Insurance contributions for eligible apprentices where: 

• The apprentice is under 25 years old. 
• They are employed on an approved apprenticeship programme. 
• Their earnings are below the relevant earnings threshold.  

This can deliver a significant saving when recruiting young apprentices.