20 Apprenticeship Funding Questions from Employers

It depends on your circumstances. 

Non-levy employers generally contribute 5% of the cost of apprenticeship training, with government funding the remaining 95%. 

For some apprentices under 25, training can be fully funded. 

Levy-paying employers use funds in their Growth and Skills Levy account to pay for apprenticeship training. 

The Growth and Skills Levy replaced the Apprenticeship Levy in April 2026. 

Employers with a pay bill over £3 million pay into the levy, with funds available through their apprenticeship service account to support apprenticeship training. 

You can still access apprenticeship funding. 

Non-levy employers generally contribute 5% towards training costs, with government funding the remaining 95%. 

Eligible apprentices under 25 may have their training fully funded. 

From 1 October 2026, eligible non-levy employers can receive a £2,000 payment when taking on a new employee aged 16–24 who starts an eligible apprenticeship. 

The payment is made in instalments, subject to the relevant conditions. 

The £1,000 payment is available for eligible apprentices aged 16–18. 

It can also apply to apprentices aged 19–24 who have an Education, Health and Care Plan or are a care leaver. 

The apprentice’s age is assessed when their training starts. 

Eligible employers can receive a £2,000 incentive when employing an apprentice on a qualifying foundation apprenticeship. 

The current eligibility includes young people aged 16–21, with additional eligibility routes for some 22–24-year-olds. 

The Youth Jobs Grant is worth £3,000 for eligible new hires aged 18–24 who have been receiving Universal Credit and looking for work for six months or more. 

There is an important process to follow: the employer applies to the DWP before advertising, and Jobcentre Plus puts candidates forward. Employers who hire through their own advert cannot claim this payment. 

Yes. 

Where an apprentice meets the eligibility criteria for more than one payment, the incentives can stack. 

This means it’s important to look at the apprentice’s full circumstances rather than focusing on one incentive in isolation. 

In the right circumstances, potentially. 

Lifetime’s current example shows an eligible 18-year-old foundation apprentice who is a new hire, has been receiving Universal Credit for six months or more and starts after 1 October 2026. 

The combined incentives plus potential National Insurance saving total around £10,000 in that example. 

This isn’t a guaranteed amount for every apprentice. Eligibility and the value of National Insurance savings vary by individual circumstances and salary. 

For apprentices under 25, employers don’t pay employer National Insurance on earnings until they exceed £50,270. 

Depending on salary, this can represent a significant annual saving. 

For example, Lifetime estimates potential annual savings of around £1,650 on a £16,000 salary and £3,000 on a £25,000 salary. 

No. 

Unlike the government incentive payments, there’s no separate application for the National Insurance saving. Payroll applies the appropriate National Insurance category. 

However, employers should check their individual circumstances, including whether their National Insurance liability is already covered by the Employment Allowance. 

Yes. 

Apprenticeships aren’t just for new recruits. They can help existing employees develop new skills and progress within your organisation. 

The programme must develop new skills rather than simply recognise skills the employee already has. 

No. 

The £2,000 apprenticeship hiring payment is intended for eligible new employees joining the organisation. 

However, existing employees may still benefit from apprenticeship training funding and, depending on their circumstances, other support such as the young apprentice payment and National Insurance savings. 

No. 

The cash incentives currently stop at age 24, but apprenticeship training funding continues to be available for older apprentices. 

For non-levy employers, a typical arrangement for an apprentice aged 25 or over is a 5% employer contribution, with government funding the remaining 95%. 

If you are a levy-paying employer and your apprenticeship service account no longer has sufficient funds, government support continues. 

For apprentices under 25, government covers 100% of training costs once levy funds are exhausted. 

For apprentices aged 25 and over, the employer contributes 25% and government funds the remaining 75%. 

Yes. 

Under the current rules, levy funds expire 12 months after they enter your account, rather than 24 months. 

For employers with accumulated funds, it’s therefore important to plan how those funds will be used. 

Yes. 

Age can affect both training funding and eligibility for additional incentives. 

For example, the £1,000 young apprentice payment is linked to age, while the £2,000 hiring payment applies to eligible new starters aged 16–24. 

Payment schedules vary by scheme. 

For example, the £2,000 apprenticeship hiring payment is paid in two instalments, while the Foundation Apprenticeship incentive is paid in three. 

Payments depend on the apprentice remaining on programme and their circumstances continuing to meet the relevant requirements. Employers should also allow time for payments to reach them after Lifetime receives the relevant government funds. 

Funding and incentives depend on the apprenticeship programme, employer circumstances and apprentice eligibility. 

The best approach is to check the specific apprenticeship and individual circumstances before making assumptions about what support will be available. 

You don’t need to navigate all of the funding rules alone. 

Lifetime can help you understand what funding and incentives may apply to your organisation, what they’re worth and when you could receive them. 

We can also support you with the relevant paperwork and claims.