England Reworks Apprenticeship Funding, Prioritizing Younger Workers

The English government has reformed its apprenticeship funding system, effective August and October 2026, to channel support toward younger apprentices aged 16 to 24 with full training funds and new hiring payments[1][4][12]. This shift significantly alters how businesses fund workforce training, making it cheaper to employ and train younger individuals while increasing costs for older apprentices. The reforms aim to counter a surge in youth unemployment across England[1][13][14][15].

What the records show

The Apprenticeship Levy has been replaced by the Growth and Skills Levy[2][3][4]. This new levy allows for broader skills development, including short, modular "apprenticeship units" that became available from April 2026[2][3][4].

For non-levy paying employers, training for apprentices aged 16 to 24 will be fully funded starting August 1, 2026[1][4][12][13]. Levy-paying employers will also receive full funding for 16-24 year olds once their levy funds are exhausted, from August 1, 2026[12][13][16]. A new £2,000 hiring payment for non-levy employers taking on 16-24 year olds will be available from October 2026[1][5][11][12]. Employers may also access a £3,000 Youth Jobs Grant for eligible 18-24 year olds[1][12].

Conversely, training older workers will become more expensive for levy payers. From August 1, 2026, once levy funds are exhausted, employers will contribute 25% of training costs for apprentices aged 25 and over. This is an increase from the previous 5% co-investment rate[4][13][16][17][19]. The 10% government top-up on levy funds has been removed, and funds will now expire after 12 months instead of 24. Both of these changes are effective August 1, 2026[2][3][4][16][17][19].

Certain leadership and management apprenticeship standards have also been defunded[6][7][8][9].

The timeline

In April 2026, short, modular "apprenticeship units" became available for funding through the new system[2][3][4].

Beginning August 1, 2026, full funding for 16-24 year-old apprentices took effect[1][12][13]. On the same date, the 10% government top-up on levy funds ended[3][17], and levy funds started expiring after 12 months instead of 24[3][4]. Also on August 1, 2026, the employer co-investment rate for apprentices aged 25 and over increased to 25% once levy funds are depleted[4][13][16][17][19].

By October 2026, a £2,000 hiring payment became available for non-levy employers recruiting 16-24 year olds[1][5][11][12].

What changed and for whom

The government's stated intention is to rebalance the system towards younger people[1]. This responds to a significant decline in youth apprenticeship starts, which nearly halved for those under 19 between 2014/15 and 2020/21[20]. The number of young people aged 16-24 not in education, employment, or training (NEET) surpassed 1 million between January and March 2026[14][15].

The defunding of leadership and management apprenticeships has drawn criticism. Organizations like Chartered ABS have warned this decision is "short-sighted" and risks "undermining social mobility and UK productivity"[6][7][10]. Evidence from employers and providers indicates that these programs do not exclusively serve older workers. Approximately 30% of apprentices in the Chartered Manager Degree Apprenticeship (CMDA) are aged 24 or under[10].

What the subject has said publicly

The government has signaled its goal to "rebalance the system towards younger people" to tackle the youth jobs crisis[1][17]. Vivienne Stern, Chief Executive of Universities UK, stated that universities "share the government's commitment to tackling youth unemployment"[7]. However, UVAC described the decision to remove key management pathways as "double daft"[10].

What we could not confirm

What the specific long-term economic impact will be from making it more expensive to train older workers.

Whether the reforms will achieve the government's target of significantly reducing the number of young people not in education, employment, or training.

The specific number of apprenticeship standards defunded beyond leadership and management programs.