Apprenticeship Funding & Employer Support (with updates from August 2026) 

Overview 

Apprenticeships in England are designed to help employers recruit, train, and develop staff through government-supported funding. From 1 August 2026, updated funding rules apply from the Department for Work and Pensions (DWP).  

These changes aim to: 

• Increase investment in young people (under 25) 
• Simplify funding arrangements 
• Provide greater flexibility for employers 
• Improve workforce development and skills 

1. How Apprenticeship Funding Works 

Employers access apprenticeship funding in two main ways depending on whether they pay the Growth and Skills Levy (formerly the Apprenticeship Levy). 

a) Levy-Paying Employers 

Employers with a pay bill of over £3 million contribute to the Growth and Skills Levy. 

Funds are held in a digital Apprenticeship Service (DAS) account 

Used to pay for: 

Training and Assessment up to the funding band maximum 

From August 2026: 

The 10% government top-up is removed 

Funds expire after 12 months 

If levy funds are insufficient: 

• Employer pays 25% (previously 5%) 
• Government pays 75% (previously 95%) 

Employers must manage their levy funds carefully to avoid expiry and increased co-investment costs. It is important to check and forecast payments from your digital Apprenticeship Service (DAS) account.  

b) Non-Levy Employers (SMEs) 

Employers who do not pay the levy receive government co-investment support towards the cost of Training and Assessment up to the funding band maximum. 

 

From August 2026: 

Apprentices aged under 25 

• 100% government-funded training and assessment up to the funding band maximum 

Apprentices aged 25+ 

• Government pays 95% 
• Employer pays 5% 

This makes apprenticeships a zero-training cost option for most young recruits. 

 

2. Employer Incentives for Recruiting Apprentices 

Employers can access a range of financial incentives, many of which can be combined. 

a) £1,000 Young Apprentice Incentive (Existing Incentive) 

Employers will receive: 

£1,000 per apprentice if the apprentice is: 

Aged 16–18, OR Aged 19–24 and has an Education, Health and Care Plan (EHCP), or has been in local authority care 

Paid in 2 instalments: 

£500 after 90 days after enrolment date 

£500 after 12 months on programme 

Applies to all employers (levy and non-levy) 

b) £2,000 SME Hiring Incentive (New Incentive from October 2026) 

Non-levy employers can receive: 

£2,000 for each new apprentice aged 16–24* 

*Full Rules to follow. The apprentice must be recruited as a new employee to the business a maximum of 3 months before the apprentice enrolment date. This is checked by HMRC. 

This is additional funding and does not replace the £1,000 incentive 

c) £3,000 Youth Jobs Grant 

Employers may also receive: 

£3,000 for recruiting 18–24-year-olds who have been on Universal Credit for 6+ months. Speak to your local Job Centre about how you can find suitable candidates. They may be able to support.  

d) Incentives Can Be Combined 

Employers can stack incentives, where eligible 

Examples: 

16–18 apprentice (SME): 

£1,000 + £2,000: Total = £3,000 

18–24 apprentice (SME + Universal Credit 6M+): 

£2,000 + £3,000: Total = £5,000 

Full eligibility example (16-18 apprentice SME + Universal Credit 6M+): 

£1,000 + £2,000 + £3,000: Total up to £6,000 total support 

e) Additional Cost Savings 

Employers also benefit from: 

• No employer National Insurance contributions for apprentices under 25 (within thresholds) 
• Fully funded training for under 25s (SME/non-levy employers) 
• Reduced recruitment and training costs 

 

3. What the apprenticeship funding covers 

Apprenticeship funding supports: 

• Training delivered by an approved provider or college 
• Assessment throughout the apprenticeship programme 
• Development of required knowledge, skills, and behaviours 

Full funding guidance: 

Get funding for apprenticeship training (GOV.UK) 

 

4. Further Information for employers (Official Sources) 

Apprenticeship funding rules (2026–2027): 

https://www.gov.uk/government/publications/apprenticeship-funding-rules-and-assessment-plan-guidance-2026-to-2027 

Get funding for apprenticeship training: 

https://www.gov.uk/employing-an-apprentice/get-funding 

Apprenticeship funding overview: 

https://www.gov.uk/government/publications/apprenticeship-funding/apprenticeship-funding 

Apprenticeship employer incentives: 

https://www.apprenticeships.gov.uk/employers/financial-incentives 

Explore apprenticeship funding and support: 

https://www.apprenticeships.gov.uk/employers/explore-funding-options 

Summary 

Apprenticeships continue to provide a low-cost, high-impact route to recruitment and workforce development. With full funding for younger apprentices and stackable financial incentives, hiring an apprentice from August 2026 is one of the most cost-effective ways to grow your business and develop future talent. Myerscough College is one the leading apprenticeship providers in the specialist Land-based sector. We can support you every step of the way of your apprenticeships journey.