The Government has announced significant changes to apprenticeship funding for the 2026/27 academic year, creating new opportunities for employers to recruit and develop talent. The new rules apply to apprenticeships starting between 1 August 2026 and 31 July 2027.
For many employers, particularly those that do not pay the apprenticeship levy, these changes could substantially reduce the cost of recruiting and training apprentices.
100% government funding extend to 16-24 year olds
One of the most significant changes is the introduction of fully funded apprenticeship training and assessment costs for apprentices aged 16 to 24 working for non-levy-paying employers.
This means eligible employers will no longer be required to make a financial contribution towards apprenticeship training costs, removing one of the biggest barriers to recruiting and developing new talent in that age bracket.
For employers looking to strengthen their workforce, address skills shortages or build future talent pipelines, apprenticeships have become a more accessible and affordable option than ever before.
For those aged 25 and over, Crown will work with employers to explore utilising levy transfer funds to cover any shortfall, where available.
New £2,000 hiring payment
In addition to fully funded training, non-levy employers will be able to claim a £2,000 hiring payment when they recruit a new apprentice aged 16 to 24. The new payment is due to become available from October 2026 with new hires up to 90 days prior being in scope for the initiative.
This additional support has been designed to encourage employers to create more apprenticeship opportunities for young people entering the workforce. The funding can help employers offset recruitment, onboarding and wider employment costs associated with taking on a new apprentice.
What Does This Mean for Employers?
The combined impact of these changes means that employers could benefit from:
- Fully funded apprenticeship training and assessment costs for eligible 16 to 24-year-old apprentices
- A £1,000 young apprentice employer incentive for each apprentice who is aged 16-18 at the training start date
- An additional £2,000 hiring payment for each eligible new apprentice* starting training from October 2026
- Increased affordability when bringing new talent into the organisation
- Enhanced opportunities to address skills gaps and workforce planning challenges
- Greater support for developing a sustainable talent pipeline for the future
* To be eligible, a new apprentice must have only joined the PAYE scheme with the employer within the 90 days prior to training starting.
Now is the Time to Plan
With these changes taking effect for apprenticeship starts from August 2026 and the new hiring incentive following in October, employers may wish to start reviewing workforce plans, succession requirements and recruitment needs now.
Apprenticeships continue to provide a valuable route into employment, enabling individuals to gain practical experience while developing the skills and knowledge needed to succeed. The new funding arrangements make it easier than ever for employers to invest in people and support long-term business growth.
Find Out More
If your organisation is considering recruiting an apprentice or would like to understand how these changes could benefit your workforce, speak our Business Development team to explore the opportunities available.
