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Amy Cross-Webber -
17 December, 2025
What you need to know
The Government’s latest Budget, announced in November 2025, brings major improvements to apprenticeship funding. We’ve summarised the key points so you can plan training and recruitment with confidence.
Apprenticeship reforms – general
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What’s changing |
Details |
Date effective from |
|
Funding for Level 7 apprenticeships |
The Government will withdraw funding for Level 7 apprenticeships from January 2026 for anyone aged 22 and over. |
January 2026. |
|
Apprenticeship minimum wage |
Apprentice's minimum wage will rise to £8 per/hour (see below for other wage updates). |
April 2026. |
|
Foundation Apprenticeships |
The Government has introduced Foundation Apprenticeships as entry-level programmes (level 2) for young people at the start of their careers. They are currently available in the following sectors:
> Health and social care |
August 2025. |
|
Apprenticeship units |
More flexibility in programme funding as the apprenticeship levy changes to the Growth & Skills Levy, which includes the new apprenticeship units. |
April 2026. |
|
Assessment model changes |
The Government is streamlining the apprenticeship assessment model to introduce greater flexibility. This will allow training providers to deliver elements of the assessment while the apprentice is on programme. These changes will apply to all apprenticeship standards, and the existing assessment plans are currently being rewritten. |
Already in progress. |
Apprenticeship reforms for levy paying employers
|
What’s changing |
Details |
Date effective from |
|
Levy funds expiry window |
Levy funds currently stay in your digital account and can be accessed for 24 months. This is being reduced to a 12-month window. |
From August 2026. |
|
10% levy fund top-up |
In addition to the levy paid into your digital account, the government adds an additional 10% top-up. This is being removed. You will no longer receive the 10% levy fund top-up from the government into your digital account. |
From August 2026. |
|
Co-investment for levy payers (once all levy funds used)
|
Once you have used all the levy funding from your digital account, you can continue to offer apprenticeships and use the current government co-investment model of 95% paid by the government, 5% paid by the employer. This is moving to new co-investment model of 75% paid by the government and 25% paid by the employer. |
From August 2026. |
Apprenticeship reforms for SMEs
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What’s changing |
Details |
Date effective from |
|
Funding for apprentices aged under 25. |
The government will fully fund apprenticeship programmes for SMEs taking on apprentices aged under 25. Apprentices aged 25 and over will continue under the 95%/5% co-investment model. |
From August 2026. |
Budget updates
Minimum wage updates
|
What’s changing |
Details |
New rate from April 2026 |
|
Apprentice Rate |
£7.55 |
£8.00 |
|
National Living Wage (21+) |
£12.21 |
£12.71 |
|
18-20 Year Olds |
£10.00 |
£10.85 |
|
16–17 Year Olds |
£7.55 |
£8.00 |
Income tax & NIC thresholds
The Chancellor confirmed that thresholds will remain frozen until April 2031:
> Personal allowance: £12,570- > Higher rate threshold: £50,270
- > Additional rate threshold: £125,140
- > Employer NICs secondary threshold: £5,000*
* Don’t forget, there are no Employer NI contributions to pay if your apprentice is under 25 and earning less than the Upper Earnings Limit (£967 a week).
For more information about all of the above click here to go to the Department of Education website.
Contact us to discuss the best apprenticeship funding options for you or your business.
All information correct as of 09/12/25 and is subject to change.
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