Apprenticeship Funding Changes 2026: What Employers Need to Know | CQM T&C

Over the last few months, there has been increased discussion across the apprenticeship landscape around funding rule changes and what these updates will mean in practice for employers. This has coincided with updates on the defunding of certain apprenticeships and the introduction of several apprenticeship units.

For organisations responsible for workforce development and apprenticeship levy spend, staying informed and prepared is more important than ever.

At CQM Training & Consultancy, we work closely with employers to simplify apprenticeship funding and support confident, informed decision-making that aligns with both budgets and long-term workforce development goals.

Included in This Blog:

• What’s Changing From August 2026 in Apprenticeship Funding
• Apprenticeship Levy Funds Will Now Expire After 12 Months
• Updated Co-Investment Rates for Levy Employers
• New Rules for Non-Levy Apprenticeship Funding
• What These Apprenticeship Funding Changes Mean in Practice
• What You Need To Do Now
• How CQM Supports Your Apprenticeship Planning
• Why You Should Act Now on the Apprenticeship Funding Changes
• Frequently Asked Questions

From 1st August 2026, a series of updates to apprenticeship funding rules will come into effect. These changes impact not only how funding is accessed but also how it must be managed, monitored and planned.

Some of the updates are technical or operational, but several will directly influence employer decision-making, particularly around budgeting, recruitment planning and training delivery timelines.

Understanding these changes early allows you to move from a reactive approach to a more strategic one, ensuring funding is fully utilised and aligned with your business priorities.

One of the most impactful changes is the reduction in the levy fund expiry window from 24 months to 12 months for all new funds entering employer accounts from August 2026.

To clarify:

• Funds added before 1 August 2026 will still expire after 24 months
• Funds added from 1 August 2026 onwards will expire after 12 months

This change significantly shortens the time employers have to plan, commit and spend their levy funds.

In practice, this means:

• Less flexibility to “hold” funds for future programmes
• A greater need for forward planning and forecasting
• Increased risk of unused funds expiring if not actively managed

For many employers, this will require a shift in mindset from a passive “use when needed” approach to a more structured and proactive funding strategy.

It also places greater importance on having a clear pipeline of apprenticeship starts and aligning those with organisational development plans.

You can read the latest government guidance alongside this post to see how changes apply in practice.

Another key change is the increase in co-investment rates for levy-paying employers who do not have sufficient funds available.

From August 2026:

• Levy-paying employers will contribute 25% of training costs where levy funds are insufficient (previously 5%)
• Government funding will cover the remaining 75%

For non-levy employers, the structure becomes more targeted:

• 0% contribution for apprentices aged 16–24
• 5% contribution for apprentices aged 25 and over

This change has a direct impact on training budgets and overall apprenticeship affordability.

For levy-paying organisations in particular, it highlights the importance of:

• Monitoring levy balances closely
• Planning starts around funding availability
• Avoiding unnecessary co-investment costs where levy funds could have been used

For non-levy employers, the updated funding model introduces both simplification and opportunity.

The move to fully fund apprentices aged 16–24 from October 2026 removes a key barrier for employers looking to recruit early-career talent. This can be particularly valuable for organisations aiming to:

• Build entry-level talent pipelines
• Address skills shortages
• Invest in long-term workforce development

In addition, a new £2,000 hiring incentive also being introduced in October 2026, further strengthens the business case for apprenticeships.

SMEs can also explore levy transfer opportunities from larger organisations, which can help fund apprenticeship training.

Taken together, these changes make apprenticeships a more accessible and cost-effective option for many smaller employers.

While the rule changes are important, the key takeaway is how they will influence planning and decision-making across apprenticeship programmes.

Overall, these updates encourage a more structured and forward-looking approach, with greater emphasis on visibility, coordination and alignment between apprenticeship activity and wider workforce planning.

The reduction in levy expiry to 12 months reinforces the importance of planning apprenticeship activity in line with known or forecast workforce needs. This places greater value on having a clear training pipeline and ensuring opportunities are identified and scheduled in advance where possible.

For non-levy employers, the introduction of full funding for 16–24-year-olds and the new hiring incentive strengthens the role of apprenticeships as a practical route for developing early-career talent and supporting recruitment strategies.

Alongside this, the move towards provider-led data submission highlights the importance of smooth operational coordination. Clear communication between employers and training providers will help ensure apprenticeship information is accurate, approvals are completed efficiently, and delivery runs without delay.

Taken together, these changes place greater emphasis on structured planning and effective collaboration, helping employers make consistent use of available funding while supporting long-term workforce development goals.

If you are reviewing your apprenticeship strategy ahead of August 2026, there are several practical steps you can take now to stay ahead:

Review Your Levy Position

Understand how much funding you currently have, when it expires, and how it aligns with planned activity.

Map Planned Apprenticeship Starts

Ensure your upcoming programmes align with funding availability, particularly under the new 12-month expiry rule.

Assess Financial Impact

Model how the 25% co-investment rate could affect your budget if levy funds are insufficient.

Bring Forward Training Where Appropriate

If you have unused levy funds approaching expiry, consider accelerating planned starts.

Check Compliance Requirements

Ensure PAYE schemes are correctly declared and that you understand the new process for apprentice data submission.

To better understand how apprenticeship funding works in practice, watch:
How the apprenticeship budget works from the Department for Education.

Taking these steps now will help you avoid last-minute decisions and ensure your strategy remains aligned with business priorities.

Navigating apprenticeship funding changes can be complex, particularly when balancing compliance, cost control and evolving workforce needs. At CQM Training & Consultancy, we provide structured, practical support that helps you move from uncertainty to a clear, confident strategy.

Levy Calculator

We offer a dedicated online levy calculator designed to give you clear visibility of your apprenticeship funding position. This tool helps you model contributions, understand expiry timelines and map out potential training plans with greater confidence.

As part of the upcoming funding changes, we are currently updating the calculator to reflect the new rules, including the move to a 12-month levy expiry window and revised co-investment rates. This will ensure the tool continues to provide accurate, practical insights aligned with the latest guidance.

By downloading the calculator now, you can begin exploring your current levy position while also registering your interest. Once the updated version is available, you will be among the first to receive access, ensuring you can plan ahead with the most up-to-date information.

Tailored Business Benefits

Every organisation has different priorities, whether that is addressing skills gaps, building leadership capability or supporting long-term growth. We work closely with you to understand these objectives from the outset, ensuring your apprenticeship strategy is aligned with measurable business outcomes.

With more than 30 years of experience supporting organisations across a wide range of industries, we help you use apprenticeship funding as a strategic tool rather than an administrative requirement. This means every levy contribution is focused on delivering tangible return on investment and supporting your wider business goals.

Dedicated Support Throughout the Process

You will have a single, expert point of contact who supports you at every stage of your apprenticeship journey. From initial planning and levy optimisation through to apprentice onboarding, training coordination and final certification, we manage the process end-to-end.

This collaborative approach reduces administrative burden, improves efficiency and ensures nothing is missed. It also gives you confidence that your programmes are delivered smoothly, remain compliant and achieve successful outcomes for both your business and your apprentices.

The apprenticeship funding changes are not something to panic about, but they are something to plan for. The earlier you review your position, the more options you are likely to have and the easier it will be to make the most of the funding available to you.

If you leave it too late, you may find that your options become more limited, especially when it comes to levy expiry and future starts. A short review now can help you stay ahead, avoid wasted funding and make sure your apprenticeship strategy remains effective.

The key is to stay informed, plan early and make sure your apprenticeship funding is working as effectively as possible for your organisation.

To talk through how these changes could affect your business get in touch today using the form below.

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