Apprenticeships

Who pays: levy, co-investment and age

Employers that pay the growth and skills levy (the new name for the apprenticeship levy) use the funds in their apprenticeship service account. When an employer does not pay the levy, or a levy payer has run out of funds, the government pays some or all of the cost. This is called co-investment. The split depends on when the apprenticeship started and the apprentice's age at the start of their training:

• Levy-paying employers pay from their apprenticeship service account while it has funds. If the funds run out, the employer co-invests on the rest at the rate for a levy payer with insufficient funds, which is not always the rate for an employer that does not pay the levy.
• For starts from 1 August 2026 (2026 to 2027 rules): no employer co-investment for apprentices aged 16 to 24 at an employer that does not pay the levy or a levy payer with insufficient funds; the government pays 100% and the provider must not ask the employer for any contribution up to the band maximum (paragraphs 214 and 215). For apprentices aged 25 or over, an employer that does not pay the levy pays 5% (government 95%) and a levy payer with insufficient funds pays 25% (government 75%) (paragraph 213). The 25% rate was confirmed in Version 3 of the rules (29 July 2026).
• For starts from 1 August 2025 to 31 July 2026 (2025 to 2026 rules): employers co-invest 5% (government 95%), except that an employer that does not pay the levy pays nothing for an apprentice aged 16 to 21, or aged 22 to 24 with an EHC plan or care history. That exception never applied to levy payers.
• Every apprenticeship is allocated to one of 30 funding bands, from £1,500 to £27,000. The band is the most an employer's levy funds can pay towards the apprenticeship, and the most the government will co-invest on (Allocating apprenticeship funding bands, Skills England).
• In every case, if the price is above the funding band maximum, the employer pays the whole difference. Agree this with the employer outside the ILR and the apprenticeship service (paragraph 210.2).
• The 10% government top-up is no longer added to new funds entering levy accounts from 1 August 2026.
• A 15-year-old counts as 16 if their 16th birthday falls between the last Friday of June and 31 August.

How the money is paid: the 80/20 split

The price is recorded on the ILR in two parts: TNP1 is the cost of training only, and TNP2 is the end-point assessment price (paragraph 211.1). The assessment price should be no more than 20% of the funding band maximum (paragraph 143.2.1).

80% of the total negotiated price, up to the band maximum, is paid in equal monthly instalments across the apprenticeship. The remaining 20% is the completion payment. It is paid once the apprentice has finished all their learning and all parts of the end-point assessment. The apprentice does not need to pass, and the payment is not tied to the cost of assessment (paragraphs 189 to 190).

From Version 2 (15 July 2026), the completion payment is no longer held back if employer co-investment has not been collected and recorded on the ILR.

For apprenticeships starting on or after 1 August 2026, the provider enters the apprenticeship details once, on the ILR. The employer must review and approve them in their apprenticeship service account before any payment is made (paragraph 195). The old rule that the price on the ILR and in the apprenticeship service must be the same has been removed, and later price changes need the employer's approval only if the total price goes up (paragraph 211.3). For apprentices who started before 1 August 2026 the earlier rules still apply: the details in the apprenticeship service must match the ILR, including the same price, or payments are withheld (apprenticeship funding rules 2025 to 2026, paragraphs 169 and 179.3).

To qualify for any funding, the apprentice must stay in learning for at least 42 days. Payments are not held back during that time, but they are recovered if the apprentice leaves before 42 days (paragraphs 221 to 223).

Extra payments

These are paid on top of the funding band and are never charged to the employer (paragraph 215.2).

• £1,000 to the employer and £1,000 to the provider when, at the start of training, the apprentice is aged 16 to 18, or 19 to 24 with an education, health and care (EHC) plan or care experience (paragraph 125). Each is paid 50% at 90 days and 50% at 365 days in learning, or at 242 days for standards under 12 months and for foundation apprenticeships (paragraph 128).
• £2,000 hiring payment for employers that do not pay the levy, when the apprentice is aged 16 to 24, the practical period starts on or after 1 October 2026, and the apprentice had worked for that employer for no more than 90 days before it started (paragraph 133). It is paid in two halves, at 90 and 365 days (paragraph 137). The government can change or withdraw it during the year with three months' notice (paragraph 135).
• £3,000 bursary for care leavers under 25, paid to the apprentice (paragraph 127).
• The provider must pass employer payments on in full within 30 working days of receiving them (paragraphs 131 and 138).

Age limits on some apprenticeships

Most standards have no upper age limit. These do (age is taken at the start of training):

• Level 7 standards: for apprenticeships starting on or after 1 January 2026, government funding is only available for apprentices aged 16 to 21, or aged 22 to 24 with an EHC plan or who are, or have been, in the care of their local authority (2026 to 2027 rules paragraph 32; 2025 to 2026 rules paragraph 28).
• Level 2 Administration Assistant (ST1472): funded only for apprentices aged 16 to 24 (paragraph 33).
• Foundation apprenticeships: funded for apprentices aged 16 to 21, or 22 to 24 with an EHC plan or care experience, or who are in or have left prison (paragraph 160). They have their own standards, published by Skills England.
• A Level 7 non-mandatory unit or qualification must not be used to deliver the content of a Level 6 standard (paragraph 68.3).

Breaks in learning and change of employer

A break in learning pauses the monthly payments. For apprenticeships it is not optional: the provider must record a break when no off-the-job learning is planned within a calendar month (three months for agreed block-release or front-loaded models) (paragraphs 307 to 307.1). Do not record a break for annual leave, public holidays or short absences (paragraph 308).

If the apprentice's job ends for a reason other than redundancy: when no new job has started within 4 weeks, record a break in learning. If they have not restarted with a new employer within a further 8 weeks (12 weeks in total after the job ended), the provider must withdraw them (paragraphs 306 to 306.2).

Redundancy is different and applies whatever the start date: if the apprentice is within six months of the end of the practical period or has completed at least 75% of it, the government funds 100% of the remaining costs (up to the band maximum) and training can continue; otherwise funding continues for up to 12 weeks while a new employer is sought, and the apprentice must be withdrawn if none is found (paragraphs 312 to 316).

Other 2026 to 2027 rules to know

• The practical period must last at least 8 months after prior learning is taken into account (paragraph 77).
• Apprenticeship units, which started in April 2026, have their own funding rules on GOV.UK (paragraph 13).
• Apprenticeships that started before 1 August 2026 follow the rules for their start year (paragraph 3), except the rules on redundancy, changing to a new version of a standard, and funds in the employer's account, which apply to everyone (paragraph 4). Some rules apply by event date instead: for example, the completion payment rules apply to completions on or after 1 August 2026 (paragraph 190).
• The subcontracting rules are under review, with any changes taking effect from 2027.

Monthly income forecasting

This is FEFunding's forecasting method, not a funding rule. The forecasting engine projects future income from current earnings: if completion status is continuing (1), the planned end date is after the funding year end, and there are July (R12) earnings, those monthly earnings carry forward each month up to the month before the planned end date.

• Planned end date before 30 September → no carry-forward into the new year
• Carry-forward stops at the month before the planned end date
• Completion and EPA funding are profiled separately from on-programme