By Matt Hoyle, Head Of Operations, Kingdom Academy
From 1 August 2026, important changes are being introduced to the way apprenticeship levy funding works in England.
The Apprenticeship Levy is becoming the Growth & Skills Levy, with a wider focus on helping employers invest in high-quality skills, workforce development and training that meets business need. For employers, this creates new opportunities, but it also means funding will need to be planned and used more carefully.
At Kingdom Academy, we support employers to understand their apprenticeship funding options, plan qualification pathways and make effective use of available levy funding.
What is changing to the Apprenticeship Levy from August 2026?
From 1 August 2026, the way funds enter apprenticeship service accounts will change. Employers will continue to receive levy funds each month based on their pay bill in England, but the 10% government top-up will stop and new funds entering the account will expire after 12 months if they are not used.
This means employers will need to take a more proactive approach to workforce planning, qualification routes and apprenticeship starts.
Levy funds will expire after 12 months
One of the biggest changes is the reduction in the expiry window for new levy funds.
At the moment, unused funds expire after 24 months. From 1 August 2026, new funds entering your apprenticeship service account will expire after 12 months if they are not used. Existing funds that entered your account on or before 31 July 2026 will continue to expire after 24 months.
For employers, this makes regular levy review much more important. Funding decisions may need to be made earlier, and training plans will need to align more closely with levy expiry timelines.
The 10% government top-up will stop
Currently, apprenticeship service accounts receive funds based on the employer’s pay bill in England, with a 10% government top-up added.
From 1 August 2026, this top-up will stop. Employers will continue to receive levy funds each month, but without the additional 10% uplift. This reduces the overall value available through the account and reinforces the importance of using levy funds in a timely and strategic way.
Co-investment costs will increase
If an employer uses all of their levy funds, they pay part of the remaining training costs through co-investment.
For apprenticeship starts up to and including 31 July 2026, the employer contribution remains 5%, with the government paying 95%. For apprenticeship starts from 1 August 2026, the employer contribution will increase to 25%, with the government paying 75%.
This is a significant change for employers who regularly exceed their levy balance or rely on co-investment to support apprenticeship activity. For example, where an apprenticeship has a £15,000 funding band, the employer contribution after levy funds are exhausted would increase from £750 at 5% to £3,750 at 25%.
Increased support for younger apprentices
The reforms also include additional support for small and medium-sized employers taking on younger apprentices.
From the 2026 to 2027 academic year, apprenticeships for under 25-year-olds will be fully funded for non-levy paying employers. From October 2026, non-levy paying employers may also be able to receive a payment of up to £2,000 when recruiting new apprentices aged 16 to 24, subject to eligibility criteria.
This creates a stronger incentive for employers to invest in early-career talent and build structured progression routes.
Apprenticeship units and more flexible training
The Growth & Skills Levy is also designed to provide more flexibility for employers. From April 2026, employers will be able to use funds to pay for apprenticeship units. These are shorter, flexible training courses designed to help existing staff develop skills in priority areas. Apprenticeship units are for employed adults aged 19 and over and can last between 30 and 140 delivery hours over a period of 1 to 16 weeks.
This gives employers another way to respond to skills gaps, support workforce development and access training without always committing to a full apprenticeship programme.
What do the Apprenticeship Levy changes mean for employers in 2026?
The August 2026 changes mark a shift towards more active levy management. Employers will need to understand what funding is available, when it expires and how it can be used to support current and future workforce needs.
For housing providers and employers planning qualification pathways, this may include:
- Reviewing current levy balances and expiry dates
- Mapping upcoming apprenticeship and qualification needs
- Identifying priority roles, teams or departments for development
- Planning starts before funding expires
- Understanding the cost impact of increased co-investment
- Considering where apprenticeship units may support shorter skills development
- Aligning apprenticeship planning with wider workforce and compliance priorities
Kingdom Academy works with employers to develop practical, high-quality learning pathways that support workforce development, professional competence and organisational priorities. We can help you review your options, understand how the Growth & Skills Levy changes may affect your training plans and identify suitable apprenticeship routes for your workforce.
Whether you are looking to make better use of levy funding, prepare for future qualification requirements or create a more structured approach to staff development, our team can help you plan with confidence. If you would like to understand how the 2026 levy changes could affect your organisation, get in touch with us. We can help you review your current position, explore suitable qualification pathways and plan how to make best use of available funding before the new rules come into effect.