Levy Transfers: How to Cover the Full Cost of Your Apprenticeship Training

by | Sep 14, 2026 | Articles

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Levy Transfers: How to Cover the Full Cost of Your Apprenticeship Training
Home » Levy Transfers: How to Cover the Full Cost of Your Apprenticeship Training

For many employers, funding is still seen as a barrier. If you’re taking on apprentices aged 25 and over, or planning multiple apprenticeship starts, even relatively small co-investment costs can affect training budgets and delay decisions.

What many non-levy paying employers don’t realise is that there may be a way to access apprenticeship training with no training costs to pay at all.

Through a levy transfer, larger levy-paying organisations can pass on unused apprenticeship funds to other employers. If your business receives a transfer, it can cover 100% of apprenticeship training and end-point assessment costs, removing the need for any co-investment contribution.

With unused levy funds expiring faster than ever under the Growth and Skills Levy, there’s never been a better time for employers on both sides of a transfer to put this option on the table.

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What Is a Levy Transfer?

Levy-paying employers (organisations with an annual pay bill over £3 million) build up funds in a digital apprenticeship account. Historically, a lot of this money has gone unused and simply expired. 

To put that in perspective, in 2025 an estimated £500 million to £1 billion in unused UK Apprenticeship Levy funds was lost annually. 

In simple terms:

  • A levy-paying employer can transfer up to 50% of their annual funds to one or more other organisations.
  • The receiving employer doesn’t need to pay the levy themselves; they just need an apprentice on a standard the transferring employer agrees to fund.
  • Transferred funds cover the full cost of training and end-point assessment, up to the funding band maximum, meaning no co-investment contribution at all.

This is separate from the standard 95%/5% or 100% co-investment routes available to non-levy employers, and it’s one of the few ways an SME can access fully-funded training for apprentices aged 25 and over, where the standard co-investment rules would normally apply a 5% contribution.

Download Our Apprenticeship Funding Guide 2026

Why Now Is the Time to Explore a Levy Transfer

One of the most significant changes under the Growth and Skills Levy is the reduction in the funding expiry window, from 24 months down to 12 months, for all new funds entering employer accounts from August 2026. 

Levy-paying employers now have far less time to use their funds before they expire, which means more organisations are actively looking for ways to spend their pot before it’s lost, including transferring it to supply chain partners, local businesses, or other organisations they work with.

If you’re a non-levy employer, this is a good moment to have that conversation with any levy-paying business you have a relationship with.

What a Levy Transfer Could Save You

Here’s what a transfer could mean in practice, compared with the standard non-levy co-investment rate, using funding bands for apprenticeship standards we deliver at CQM:

Apprenticeship Standard Funding Band Standard Non-Levy Cost (5%) Cost With a Full Levy Transfer
Food Industry Technologist (Level 3) up to £18,000 £900 £0
Business Analyst up to £18,000 £900 £0
Process Leader (Level 4) up to £11,000 £550 £0

For SME’s, eligible apprentices aged 16–24, train for free under the new apprenticeship funding reforms. Where a transfer really earns its keep is for apprentices aged 25 and over, where the 5% co-investment would otherwise apply, a levy transfer can remove that cost entirely.

How to Access a Levy Transfer

Identify a potential transfer partner. This might be a larger business in your supply chain, a group company, or another employer you have a relationship with. The government’s Apprenticeship Service includes a facility to find businesses willing to transfer funds, and levy-paying employers can also pledge unused funds publicly.

Agree the apprenticeship standard and cost. The transferring employer commits to funding a specific apprenticeship standard, up to the funding band maximum, for the full duration of that apprenticeship.

Set it up through the Apprenticeship Service. Both employers need active accounts, with the transfer approved and tracked digitally.

Don't Let Valuable Funding Go Unused

Levy funding is there to support skills development, leadership growth, and business improvement, not to sit unused or expire. Whether you’re looking to spend your own levy funds more effectively or access funding through a levy transfer, having a clear workforce development plan is essential.

Download our Apprenticeship Levy Guide for practical advice on getting the best return from apprenticeship funding. If you’re exploring apprenticeships, leadership programmes, or wider workforce development initiatives, our team can help you build a solution that aligns funding opportunities with your business objectives.

Speak to one of our specialists to discuss your training and skills development priorities using the form below.

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Frequently Asked Questions

Are levy transfers only available for new recruits or employees?

Yes. Levy transfers can fund new apprenticeship starts for both new recruits and existing employees, as long as the apprenticeship meets eligibility requirements and the transfer is agreed before training begins.

What does apprenticeship funding actually cover?

Apprenticeship funding can contribute towards eligible training and assessment costs, up to the relevant funding band maximum. Employers should also budget for costs not covered by apprenticeship funding, including the apprentice’s wages, including paid release time for off-the-job training, plus management and mentoring time, travel or equipment where applicable, and any training or qualifications outside the apprenticeship standard.

Are apprenticeships free for SMEs?

In many cases, yes. From August 2026, non-levy employers can access fully funded apprenticeship training and assessment for eligible apprentices aged 16-24, up to the funding band maximum. 

For apprentices aged 25 and over, employers would normally be required to contribute towards training costs. However, if a levy-paying organisation transfers funds to your business through a levy transfer, this can cover 100% of apprenticeship training and end-point assessment costs, removing the need for any employer contribution. 

This makes levy transfers a particularly valuable funding option for businesses looking to upskill existing employees or recruit apprentices aged 25 and over.

How much funding is available for an apprenticeship?

Each apprenticeship standard has a maximum funding band set by the government. The funding available depends on the apprenticeship being delivered and may range from a few thousand pounds to over £20,000.

Can levy-paying employers use levy transfers if they expect to run out of funds?

Yes. Levy-paying employers can use levy transfer funds to cover the full cost of an apprenticeship, avoiding the 25% co-investment contribution if their own levy funds are insufficient. However, the transfer must be arranged before the apprenticeship starts. Employers cannot begin an apprenticeship using their own levy funds and then switch to transfer funds partway through when their levy pot runs out.

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