Following the government’s Autumn Budget on 26 November 2025, several significant changes have been confirmed to apprenticeship funding and the Apprenticeship Levy system.
Below is a summary of what is officially known and how it may affect your organisation.
For all employers
Apprenticeship system reforms
- The government has confirmed that the current Apprenticeship Levy will be replaced by the Growth & Skills Levy from April 2026.
- As part of this reform, the apprenticeship system will be simplified, including a review and rationalisation of existing apprenticeship standards.
- No official list of withdrawn or amended standards has yet been published.
Employer National Insurance Contributions (NICs)
Employers do not pay NICs for apprentices under 25, provided their earnings are below the Upper Earnings Limit (currently £50,270 per year).
For large employers (Levy payers – payroll over £3m)
Changes confirmed for April 2026 under the new Growth & Skills Levy:
- Levy funds will expire after 12 months (currently 24 months)
- The 10% government top-up to levy accounts will end
- If levy funds do not fully cover the apprenticeship cost, government co-investment will reduce from 95% to 75% (with the employer to pay the remaining 25%)
Recommended actions:
- Review planned apprenticeship starts and future skills needs early
- Prioritise use of levy funds close to expiry under the new 12-month window
- Forecast apprenticeship spend for 2026–27 to understand new cost implications
