The Department for Work and Pensions (DWP) has released version 2 of the Apprenticeship Funding Rules for 2026 – 2027 that employers in England must follow to get funding for their apprenticeships. A draft of the rules was published in April 2026.
The 2026 to 2027 funding rules will apply to apprenticeships starting between 1 August 2026 and 31 July 2027. There are different funding rules for different apprenticeship start dates, so employers must follow the funding rules that apply to each apprentice.
Key changes to the rules for employers include:
Clarification that the minimum volume of off-the-job training for each standard can be found on the Skills England website (on each standard)
Clarification that employers must keep their PAYE information in their apprenticeship service account up to date
A reminder that the individualised learning record (ILR) planned end date must not change once submitted, even if the apprenticeship agreement is extended (unless there has been a break in learning and subsequent restart)
A reminder that off-the-job training (OTJT) active learning does not include English and maths standalone qualifications
At the end of the programme, the employer, provider and learner must agree that the content of the training plan has been delivered. This can either be recorded in the training plan or in the provider’s gateway review process
A policy update that where an alternative progress review timetable is agreed with the employer this should be in advance and reviews must be no more than 6 months apart.
There will also be the following funding changes from 1 August 2026:
The 10% government top up payment is removed and will no longer be added to new funds entering levy accounts from 1 August 2026
For new starts from 1 August 2026 where a levy payer has insufficient funds in their Apprenticeship Service account, the employer co-investment rate will be 25%
For new starts from 1 August 2026 where an employer does not pay the levy and the apprentice is aged 25 or above (at the start of their apprenticeship training), the employer co-investment rate will be 5%
For new starts from 1 August 2026, where an employer does not pay the apprenticeship levy, the government will fund all the apprenticeship training and assessment costs (up to the funding band maximum) for those apprentices who are aged between 16 and 24 years old (or 15 years of age if the apprentice’s 16th birthday is between the last Friday of June and 31 August) at the start of their apprenticeship training.
Also, from October 2026, non-levy paying employers will be able to get a hiring payment of £2000 when recruiting new apprentices aged 16 to 24. This will apply to those starting an apprenticeship from 1 October 2026, providing they have started their job with their employer within the past 3 months. The payment will be in two instalments, and the employer will be eligible for the first payment once the learner has completed the first 90 days of their apprenticeship.
