Employers have often shied away from apprenticeship levy funding because it seems too complicated and onerous, and between changing government rules, confusing jargon, and different schemes for levy and non-levy payers, it’s easy to feel lost.
That’s why we’ve created this guide to the Growth & Skills Levy, to cut through the complexity and explain, in straightforward and easy-to-digest terms, how the Apprenticeship Levy works in 2025/26. Once you’ve finished reading, you’ll understand what’s changed and how your business can make the most of it.
Whether you’re a large levy-paying organisation or a growing SME, apprenticeships remain one of the most efficient ways to develop your workforce, boost retention, and reduce recruitment costs. With the latest updates, introduced to slash red tape and boost growth, they’re simpler and more flexible than ever.
Now is the perfect time to review how your business uses apprenticeships or to explore them for the first time, and make sure none of your training budget goes to waste.
The Government announced several key updates to apprenticeship funding and training rules, which came into force in August 2025. One significant change is the rebranding from Apprenticeship Levy to the Growth & Skills Levy. The changes are designed to make programmes more consistent, predictable, and business-friendly.
With the intention of making apprenticeships easier to understand and more accessible for both large and small businesses, the biggest change has been removing the 20% off-the-job training requirement. This has been replaced by a fixed minimum of training hours per apprenticeship standard.
What this means in practice is you no longer have to figure out what counts as 20% of an apprentice’s working week and can adopt a clearer, more standardised approach for every programme.
For example, a Level 3 Business Administrator apprenticeship now has a fixed minimum number of guided learning hours, agreed nationally. This helps you plan workload, supervision, and scheduling more accurately.
What else to know: Fixed hours are attached to each standard, so planning becomes simpler at the point of enrolment. Progress is evidenced against those hours using your provider’s digital system, and reviews are scheduled at set points, which helps managers keep momentum without last-minute scrambles.
For practical examples of activities that count toward off-the-job training hours, see Appendix A: Examples of Off-the-Job Training Activities at the end of this guide.
The cost of an apprenticeship is naturally a key factor in your decision on whether or not to go ahead. Here, we’ve broken down the growth and skills levy (apprenticeship levy before) for employers so you can see exactly how it works:
If your business has an annual payroll over £3 million, you pay 0.5% of that into the Growth & Skills Levy, collected monthly through PAYE. You can then use those funds to pay for apprenticeship training and assessment for new or existing staff through your digital apprenticeship service account.
If you don’t use the funds within 24 months, they expire and return to the Treasury. In essence, if you’re not taking on apprentices, you’re losing money that could have funded staff training. There are discussions underway to reduce this utilisation period to 12 months, and if adopted, this creates more pressure to utilise your funding sooner rather than later!
Tip: Ring-fence priority roles (for example, team leader, project manager, data technician) and create a rolling plan so expiring funds are always matched to upcoming starts. Many employers also set a quarterly internal review to prevent “use it or lose it”.
Smaller businesses that don’t pay the levy can still benefit from 95% to 100% funded training. The Government covers the majority of the costs, and in some cases, large employers can transfer up to 50% of their unused levy funds to help SMEs in their supply chain.
In short:
Levy payers: Use it or lose it
Non-levy payers: Almost everything is covered for you
By learning how to use the growth and skills levy for your benefit and making the most of the funds available to you, every business can use apprenticeships to unlock fully funded workforce development.
Simple costing examples:
There are still plenty of misconceptions about apprenticeships, which are potentially preventing employers and their staff from benefiting from the help available.
The reality is they’re for everyone, from entry-level staff to senior leaders. You can upskill existing employees through programmes in management, digital, finance, energy, sustainability and more, with entry-level apprenticeships right through to degree-level options.
Apprenticeships are available across seven levels, aligned with educational equivalents:
This tiered system means you can build clear career pathways within your organisation. For example, an employee might start at Level 3 in team leadership and progress to a Level 7 Senior Leader apprenticeship over several years, all fully or mostly funded.
The system for apprenticeship funding in England is now almost entirely digital. Enrolments, funding claims and tracking are all managed online, with support from your training provider, which minimises the time you need to spend taking care of the details.
There are now high-level apprenticeships, including Level 6 and 7 (equivalent to degree and master’s level), covering leadership, business improvement, and technical specialisms. They take between eighteen months and six years to complete, but not only do you keep a skilled and productive member of your workforce, but it can also cut your overall training costs too.
Apprenticeships may have once been seen merely as a way to train new recruits, but the transformation they’ve undergone in the last 20 years means they’re ideal for everyone. As an employer, they can help you build future-ready teams and retain great people.
The numbers speak for themselves. Employers who actively use the growth and skills levy typically see:
At a time when skills shortages are hitting every sector, apprenticeships offer a ready-made solution, fully or mostly funded by the government, and tailored to your business.
We’ve seen employers use levy funds to support:
Real-world quick win: Map one hard-to-fill vacancy (for example, shift supervisor) to a relevant standard, nominate two promising internal candidates and start one cohort per quarter. Within six to nine months, you’ll have measurable improvements in leadership behaviours and a live succession pipeline.
If you’re not currently using your levy, or if you’re unsure how to get started, you’re not alone. Millions of pounds go unclaimed every year simply because employers don’t know what’s available.
That’s where we can help.
At Impact Academy, we make apprenticeships simple, strategic and tailored to your goals. Whether you’re managing your own levy account or accessing funding as a smaller employer, we’ll help you get access to government-funded training in the UK, show you exactly how to use your funds effectively, ensure programmes align with your workforce needs and help you enrol, manage and measure success with minimal admin.
Identify roles & skills gaps: Link business goals to apprenticeship standards
Check funding route: Levy balance, co-investment or a levy transfer partner
Create a start schedule: Protect starts against levy expiry dates
Onboard apprentices: Digital enrolment, learning plan, manager briefing
Review & support: Fixed-hour progress reviews, on-the-job projects
Measure outcomes: Retention, promotion, productivity, time-to-competence
Book your free 30-minute consultation with Debbie today. You’ll get clear, expert advice, practical next steps, and a funding action plan designed around your business.
Under the Growth & Skills Levy, employers must record a fixed number of training hours for each apprenticeship standard.
Examples of valid activities include:
(These activities take place during paid working hours but are outside normal day-to-day duties.)
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