Apprenticeship Levy Update | Budget Special

On 26th November, Rachel Reeves delivered the Budget, much of it was released before her speech which was somewhat awkward! Along with the usual bits about tax, rail fares and other economic information, there were four significant announcements about the apprenticeships which employers need to be aware of.

This article will take each element in turn and make a suggestion for how employers should alter their behaviours around apprenticeships.

From what we know, ALL these measures will come into effect from April 2026

Announcement 1 – Training for staff aged 24 and below

What this means

If you employ a staff member who is 16-24 years old, the Government will pay the FULL COST of any apprenticeship training. They won’t pay the wages but they will fund all the apprenticeship costs. This is for organisations of ANY SIZE.

What employers should do

Look at your early talent (aged 16-24) and think about apprenticeships that would suit them and their role. Think about those in teaching assistant roles, early management training for high flyers or a technical programme in IT or finance.

Announcement 2 – The Government is withdrawing the 10% uplift to the Levy

What this means

Since 2017 for every £1 employers pay into the levy, the Government adds £0.10p. This scheme is ending in April 2026 in the hope of saving up to £500m per year. So your apprenticeship levy will be just the money you pay in, there is no top-up.

What employers should do

Check the amount in your levy pot right now and how much has been raised over the past year. Divide this by 110 and multiply by 100 to work out what you will be left with. Plan your apprenticeship spending accordingly but don’t forget about levy transfer.

Announcement 3 – The Government is increasing what employers who have spent their levy must pay in co-investment

What this means

Currently the Government pays 95% of the cost of apprenticeship training if you have spent all your levy. This means a £9000 apprenticeship will cost employers just £450.

From April 2026 this will decrease to 75% which means that employers will have to find £2250 for the same apprenticeship – a big increase.

What employers should do

Check your levy spend and whether you have gone into co-investment in the past couple of years. If you have (or you worry that you will), see alternative sources. The Levy Transfer Programme https://transfers.manage-apprenticeships.service.gov.uk/opportunities has over 200 opportunities for levy transfer today from larger organisations who can’t spend their entire levy.

It’s simple to apply and Captiva Learning can help with his. Remember that you must get the WHOLE amount of the apprenticeship funding from the transfer not just the co-investment part.

Announcement 4 – Levy funds will ‘expire’ after 12 months, not 24 months and be returned to the Government

What this means

From April 2026 (and we don’t know whether this is for levy paid for after that date or whatever is in your account already) employers will lose any unspent levy 12 months after it’s paid in rather than after 24 months. ‘Use it or lose it’ just got worse!

What employers should do

This is the most urgent bit of the budget that employers should think about. Have a look at your levy paid in and the spend over the past few years and calculate what you are losing.

And spend your levy urgently! Put forward new and existing staff members for apprenticeships, commit to apprenticeships across your organisation today!