Apprenticeship funding explained: Planning ahead for September 2026

Understanding apprenticeship funding can feel complex, especially with upcoming changes that may impact how you plan and invest in training.

Whether you’re a levy-paying employer or using co-investment, having a clear understanding of what’s changing is important to making the most of your budget and supporting your workforce effectively.

In this blog, we break down the essentials and highlight what employers should be thinking about now.

 

If you’re a levy-paying employer, your apprenticeship training is typically funded through your Digital Apprenticeship Service (DAS) account.

Your levy funds:

• Are used to pay for apprenticeship training and assessment
• Are drawn down monthly while a learner is on programme
• Currently expire after 24 months if unused

What's changing?

From August 2026, levy funds are expected to expire after 12 months instead of 24.

This means employers will need to plan and use their funds more proactively to avoid losing budget.

 

Even levy-paying employers may need to contribute towards training if their levy balance is insufficient.

Currently:

• The government covers 95% of training costs
• Employers contribute 5% (co-investment)

What's changing?

From August 2026, the co-investment model is expected to change:

Employer contributions potentially may increase to 25%.

This makes forward planning even more important, particularly for organisations with multiple learners or future growth plans.

 

Alongside funding changes, some apprenticeship standards are expected to be defunded from September 2026, including:

• Level 3 Team Leader
• Level 5 Operations Manager
• Level 4 Lead Practitioner in Adult Care

These programmes have traditionally supported progression into leadership and specialist roles.

While there is still time to enrol learners, employers may need to review how these pathways fit into their future workforce plans.

Another important change employers should be aware of is the expansion of National Insurance contribution (NIC) savings linked to apprenticeships.

Currently, employers do not pay Class 1 National Insurance contributions for apprentices under the age of 25 earning below the upper earnings limit. Changes expected from 2026 will widen this benefit, helping employers make further savings when recruiting and developing younger talent through apprenticeships.

 

These changes can have a real impact on how you develop your workforce. Without forward planning, employers may face:

• Expired levy funds and lost budget
• Increased training costs
• Gaps in leadership development pathways
• Delays in staff progression

On the other hand, organisations that plan ahead can:

• Maximise available funding
• Strengthen internal progression
• Retain and develop high-performing staff
• Build a more resilient workforce

 

Many employers are already taking proactive steps to stay ahead of these changes.

This includes:

• Reviewing levy balances more regularly
• Planning learner starts in advance
• Prioritising leadership and progression programmes
• Aligning training with long-term workforce needs

With changes coming into effect in 2026, there is still time to act, but early planning will give you the most flexibility.

We recommend:

1. Review your levy account regularly. Understand your current balance, expiry dates, and forecasted spend.

2. Plan ahead for future training needs. Look at your workforce over the next 12–24 months and identify where training will be needed. At t2 group we can help you with your workforce planning and reviews.

3. Consider progression pathways. Ensure you are making the most of current programmes while they are still available.

4. Budget for potential changes. Factor in possible increases in employer contributions and shorter funding windows.

 

Apprenticeships remain one of the most effective ways to develop skills, improve retention, and build a strong organisational culture.

In sectors like Health & Social Care, this can directly impact quality, compliance, and outcomes.

There is still time to make the most of available funding, but planning ahead is key to avoiding disruption.