Apprenticeship funding rules: what employers need to know
Everything a law firm needs to fund an apprentice under the rules for starts between 1 August 2025 and 31 July 2026, with every change from 1 August 2026 flagged so you can plan ahead.
Who you can get funding for
A genuine job in England
The learner must be employed on payroll. The apprentice's main workplace, where they spend 50%+ of their time, must be in England, with a real contract of employment, a signed apprenticeship agreement and a training plan.
Right to work for the full term
They must have the right to live and work in the UK for the whole apprenticeship. If a visa expires before the planned end date (including end-point assessment), they can't be funded. A hoped-for renewal doesn't count.
Approved standard, real new skills
Training must be on an approved standard, delivered by a provider on the APAR register, and give significant new skills. Minimum duration is 8 months. It can be a higher, equal or lower level than existing qualifications if the content is materially different.
Your route depends on your pay bill
The rules split at an annual pay bill of £3m. Select yours to see exactly how funding works.
You don't pay the levy
Annual pay bill under £3m
Incentive & additional payments
These sit on top of funded training. None of them come out of your levy account. Showing what applies to non-levy employers.
Younger apprentices
Per apprentice aged 16–18, or 19–24 with an EHCP or who is/was in local-authority care. Paid via your provider in 2 equal instalments, at 90 days and 365 days.
Foundation apprenticeships
Up to £2,000 employer incentive for each eligible foundation apprenticeship start, paid in instalments. The apprentice must stay on programme to trigger each instalment.
SME hiring payment
For non-levy employers recruiting apprentices aged 16–24 who started their job within the previous 3 months. Two instalments; the first after 90 days on programme.
Youth Jobs Grant
For hiring 18–24s who've claimed Universal Credit for 6+ months (all employers). Stackable with the £2,000 hiring payment; claim mechanics still to be confirmed.
No employer NI under 25
No employer National Insurance on apprentices under 25 earning below £50,270, a long-standing HMRC relief typically worth £2,000–£3,000 per apprentice each year.
Your key obligations
Funding comes with conditions. Miss these and the apprentice may have to be withdrawn, so build them in from day one.
Pay at least the apprentice minimum wage
£8.00/hr from 1 April 2026 for under-19s and first-year apprentices; older apprentices past year one get their age-band NMW. Underpayment means the learner must be withdrawn.
Give paid off-the-job training time
Off-the-job training happens within normal working hours. Each standard now has a set minimum number of hours; the old blanket 20% / 6-hours-a-week rule has gone.
Cover costs and keep records
You cannot ask the apprentice to contribute to training or assessment costs, and you must keep an evidence pack, agreement, workplace and PAYE details, with your provider.
Grow your own talent, and keep it
Apprenticeships don't just fill a role. The evidence shows they build loyalty.
of employers say apprentices improved staff retention
of apprentices stay with the same employer after completing
of apprentices are satisfied with their apprenticeship
of completers report a positive impact on their career
Source: DfE apprenticeships evaluation surveys.
What changes from 1 August 2026
The levy becomes the growth and skills levy, with policy moving to the DWP. Showing the changes relevant to non-levy employers.
Already in force: Level 7 restriction
Master's-level (Level 7) apprenticeships are defunded for new starts aged 22+ from 1 January 2026, still funded for 16–21s, and up to 25 with an EHCP or care background. Apprentices who started before then are funded to completion.
Not sure how the rules apply to your firm?
Tell us your pay bill and hiring plans and we'll map the funding, incentives and deadlines that apply to you, before the August 2026 changes land.
Sources: DWP/DfE Apprenticeship Funding Rules Aug 2025–Jul 2026 (v3, Jan 2026); Apprenticeship Funding Rules Aug 2026–Jul 2027 (v1, Jun 2026) and Summary of Changes; GOV.UK 'Apprenticeship funding' guidance (updated Apr 2026). England only, Scotland, Wales and Northern Ireland have separate systems. General guidance, not legal or financial advice. Prepared July 2026.