Training your employees can be a significant investment, particularly when budgets are under pressure. But if you're looking to develop your workforce, government funding can help reduce the cost of apprenticeship training.

Apprenticeships aren't just for new recruits. Existing employees can also undertake an apprenticeship, allowing you to develop skills within your current workforce while giving employees the opportunity to gain new knowledge, skills, and behaviours.

Apprenticeship funding for employers

Apprenticeship training in England is funded through the Apprenticeship Service. How much your business pays depends on whether you pay the Apprenticeship Levy, the apprentice's age, and the funding available for the apprenticeship standard.

Levy-paying employers can use funds in their Apprenticeship Service account to pay for approved apprenticeship training and assessment. Employers that don't pay the levy can usually access government funding that covers 95% of eligible training and assessment costs, with the employer contributing the remaining 5%.

For eligible apprentices aged 16 to 24, the government can fund 100% of training and assessment costs up to the funding band maximum.

Important: apprenticeship funding rules can change, so check the latest government guidance before committing to a programme.

What funding can employers get for apprenticeships?

Apprenticeship funding in England works differently depending on the size of your business and whether you pay the Apprenticeship Levy.

The Apprenticeship Levy applies to employers with an annual pay bill of more than £3 million. The levy is charged at 0.5% of the annual pay bill, with a £15,000 annual allowance.

Employers that don't pay the levy can access government funding through the Apprenticeship Service. For new apprentices aged 25 or over starting from 1 August 2026, the government contributes 95% of eligible training and assessment costs up to the relevant funding band maximum, while the employer contributes 5%.

For eligible apprentices aged 16 to 24, the government can fund 100% of training and assessment costs up to the funding band maximum, whether or not the employer pays the levy.

The funding available relates to the apprenticeship standard and its funding band. If the agreed training and assessment price exceeds the relevant funding band maximum, the employer is responsible for paying the difference.

How much will my business pay?

The amount your organisation contributes depends on whether you pay the Apprenticeship Levy, the apprentice's age, and the cost of the apprenticeship.

If you pay the Apprenticeship Levy

If your annual pay bill is more than £3 million, you pay the Apprenticeship Levy at 0.5% of your annual pay bill, with a £15,000 annual allowance.

For example, if your annual pay bill is £5 million, your annual levy liability would be:

• 0.5% of £5 million = £25,000
• £25,000 minus the £15,000 allowance = £10,000.

Your levy payments are made through PAYE, and eligible levy funds are added to your Apprenticeship Service account. You can use these funds to pay for approved apprenticeship training and assessment.

If you have insufficient funds in your account to cover the full cost of an apprenticeship, co-investment rules apply. For new apprenticeship starts from 1 August 2026, levy-paying employers with insufficient funds generally contribute 25% towards eligible training and assessment costs, with the government contributing the remaining 75%, up to the funding band maximum. Different rules can apply to certain younger apprentices.

The amount you have available in your Apprenticeship Service account won't necessarily be the same as your annual levy liability, so check your account when planning your training.

If you don't pay the Apprenticeship Levy

If you don't pay the levy, you will usually contribute 5% of eligible training and assessment costs for new apprentices aged 25 or over, with the government paying the remaining 95%, up to the relevant funding band maximum.

For example, if the agreed training and assessment cost is £8,000 and the apprentice is aged 25 or over:

• Government contribution: £7,600
• Employer contribution: £400
• Total training and assessment cost: £8,000.

If the apprentice is eligible for full government funding, the government can instead cover the full £8,000, provided the cost is within the relevant funding band maximum.

These figures relate to apprenticeship training and assessment. Employers are also responsible for paying their apprentices' wages and meeting other employment costs.

How do I fund an apprenticeship?

Once you've identified an apprenticeship that could benefit your business, you'll need to use the Apprenticeship Service to arrange the funding and manage the apprenticeship.

1. Create an Apprenticeship Service account

You'll need an Apprenticeship Service account to access apprenticeship funding and manage your apprentices.

You'll need your organisation's details, including your PAYE reference and Accounts Office reference. You'll also need to accept the employer agreement. Create an Apprenticeship Service account.

2. Check your eligibility and funding

Establish whether your organisation pays the Apprenticeship Levy and check what funding is available for the apprenticeship you want to offer.

You'll need to consider:

• your organisation's levy status
• the apprentice's age
• the apprenticeship standard
• the relevant funding band
• whether you have sufficient funds in your Apprenticeship Service account.

3. Choose an apprenticeship standard and training provider

Decide which apprenticeship is appropriate for the role and identify an approved training provider.

The training provider will work with you and the apprentice to agree the training plan and programme.

4. Add your apprentice to the Apprenticeship Service

You'll need to add the apprenticeship details to your account, including the chosen standard, training provider, and planned start date.

Your training provider can also be given permission to carry out certain actions on your behalf. Manage your Apprenticeship Service account.

5. Reserve funding if you don't pay the levy

If your organisation doesn't pay the Apprenticeship Levy, you'll generally need to reserve funding through your Apprenticeship Service account.

You can reserve funds up to three months before the planned apprenticeship start date. Reservations must then be used within the relevant timescales or they can expire. UK government apprenticeship funding guidance.

6. Agree the training and start the apprenticeship

Once the apprenticeship details have been agreed and approved, the training provider can deliver the programme and claim the relevant funding.

Your organisation will continue to employ and pay the apprentice while they complete their apprenticeship.

How do I use levy funds before they expire?

If you pay the Apprenticeship Levy, it's important to keep track of the funds available in your Apprenticeship Service account.

New levy funds entering employer accounts from August 2026 expire after 12 months. Transitional arrangements apply to funds already in accounts, so employers should check their account and the latest government guidance rather than assuming every payment has the same expiry date.

For example, if £20,000 of new levy funds entered your account in September 2026, those funds would generally need to be used within 12 months of entering the account, subject to the applicable funding rules and any transitional arrangements.

It's therefore worth regularly reviewing your balance and considering your future workforce development plans.

You can use eligible levy funds to develop existing employees as well as recruit new apprentices, provided the training meets the relevant apprenticeship funding requirements.

Can I use apprenticeships to upskill existing employees?

Yes. Apprenticeships aren't limited to people joining your organisation for the first time.

Existing employees can undertake an apprenticeship if they meet the relevant eligibility requirements and the apprenticeship provides substantial new knowledge, skills, and behaviours.

This can make apprenticeships a useful part of a wider workforce development strategy, particularly if your organisation has skills gaps in areas such as accountancy, financial services, data, technology, or management.

What apprenticeship programmes does Kaplan offer?

Kaplan has extensive experience in designing and delivering apprenticeship programmes across a range of sectors.

Our programmes cover areas including:

• Accountancy and Tax, helping develop skills across accounting, taxation, and finance
• Banking and Financial Services, including areas such as banking, mortgages, pensions, and investment
• Data and Technology, covering areas including data, digital technology, AI, and automation.

Whether you're looking to recruit new talent or develop the skills of your existing workforce, an apprenticeship can provide a structured way to invest in employee development while making use of available government funding.

Explore our apprenticeship levy funding to find out more about how apprenticeship funding works, or browse our apprenticeship programmes in Accountancy and Tax, Banking and Financial Services, and Data and Technology.

How can apprenticeships help reduce training costs?

Apprenticeships can give employers a way to develop the skills they need while accessing government support towards eligible training and assessment costs.

The amount your organisation contributes will depend on whether you pay the Apprenticeship Levy, the apprentice's age, the apprenticeship standard, and the funding available.

Rather than viewing apprenticeships simply as a way to reduce the cost of training, consider how they could fit into your wider workforce strategy. Developing existing employees can help address skills gaps, while recruiting apprentices can help you build skills for the future.

If you're considering an apprenticeship for your organisation, speak to Kaplan about your options.