Last updated: 15 July 2026
England’s final Version 1 apprenticeship funding rules for 2026/27 were published on 15 June 2026. They apply to new starts from 1 August and contain more than a change to the headline co-investment rate. Pricing, employer approvals, off-the-job evidence, progress-review schedules, completion sign-off, PAYE validation and some learner eligibility checks all need attention.
The most expensive implementation error would be to apply one funding rate to every employer. The new model has three distinct routes: 25% for a levy payer with insufficient account funds, 5% for a non-levy employer with an apprentice aged 25 or over, and government funding up to the band maximum for a non-levy employer with an apprentice aged 16 to 24. The apprentice’s age is measured at the start of apprenticeship training.
An apprenticeship that started before 1 August 2026 normally remains on the funding rules in force on its start date. Redundancy and movement to a new version of a standard are among the limited areas where the 2026/27 document says rules can apply regardless of start date. Preserve the rule version on each learner record.
Who the 2026/27 Rules Apply To
The rules apply in England to employers using apprenticeship funding and to main providers and employer-providers receiving funding for apprenticeship training and assessment. Version 1 covers starts between 1 August 2026 and 31 July 2027.
The official summary is a useful change log, but it does not replace the 173-page rules. Providers should retain both: use the summary to identify operational change, then map each changed process to the controlling paragraph and evidence requirement in the full rules.
The 25%, 5% and 0% Funding Decision Table
| New start from 1 August 2026 | Employer contribution | Government contribution | Provider control |
|---|---|---|---|
| Levy payer with sufficient funds in its apprenticeship service account | Paid from available account funds, subject to the agreed price and funding band | Not a co-investment scenario while sufficient funds are available | Check the employer’s available funds and approval status; do not quote 25% as an automatic charge to every levy payer |
| Levy payer with insufficient account funds | 25% co-investment on the eligible amount, up to the funding band maximum | 75% of that eligible amount | Reforecast employer invoices and obtain visible evidence of payment that matches the ILR |
| Non-levy employer; apprentice aged 25 or over at training start | 5% up to the funding band maximum | 95% up to the funding band maximum | Confirm age at the training start and collect co-investment throughout delivery |
| Non-levy employer; apprentice aged 16 to 24 at training start | 0% for eligible training and assessment up to the funding band maximum | 100% up to the funding band maximum | Evidence date of birth and do not request an employer contribution for eligible costs within the band |
Every route retains one important boundary: where the negotiated price exceeds the standard’s funding band maximum, the employer pays the excess in full. The under-25 waiver does not turn an above-band price into public funding.
Worked Pricing Examples
Assume an agreed eligible price of £10,000 that is within the relevant funding band:
- Levy payer in co-investment: the employer contribution is £2,500 and government contributes £7,500.
- Non-levy employer, apprentice aged 28: the employer contribution is £500 and government contributes £9,500.
- Non-levy employer, apprentice aged 20: government funds the £10,000 eligible price and the provider must not request an employer contribution toward that amount.
If the band maximum were £9,000 for the same £10,000 agreed price, the employer would also be responsible for the £1,000 above the band. Keep above-band charges separate from co-investment so the employer, ledger and ILR tell the same story.
Where co-investment applies, the provider needs evidence of a real transfer visible in its financial systems, normally an invoice and corresponding employer payment. The contribution must match the ILR. The department may withhold the final completion payment until required co-investment has been collected.
The 10% Government Levy Top-up Ends for New Funds
The government’s 10% top-up will no longer be added to new funds entering levy accounts from 1 August 2026. This is separate from the 25% co-investment rule, but the two changes combine to alter affordability for levy employers whose accounts run low.
Providers should update sales calculators and employer proposals that assume every £1 entering an account becomes £1.10. Employers with marginal balances also need a month-by-month forecast, not only a total programme price, because an account can move into insufficient-funds co-investment during delivery.
The New £2,000 Hiring Payment from October 2026
For practical periods starting from 1 October 2026, an eligible non-levy employer can receive a £2,000 payment when recruiting an apprentice aged 16 to 24. The apprentice must not have been employed by that employer for more than 90 days before the practical period starts. The correct PAYE scheme must be connected to the apprenticeship service account and validate against the apprentice’s ILR data.
The provider receives the money and must pass it to the employer in full within 30 working days. The standard payment schedule is:
- 50% after 90 days, if the apprentice remains employed and in learning; and
- 50% after 365 days, if the apprentice remains employed and in learning.
For a foundation apprenticeship or a standard whose published typical duration is under 12 months, the second trigger is day 242. There are edge cases and additional conditions in paragraphs 133 to 141, so providers should build eligibility as a controlled workflow rather than market the payment as automatic.
Nine Operational Changes to Make
1. Put the employer approval step into the enrolment workflow
Under the revised process, providers record learner and training details through the ILR; those details are then displayed in the employer’s apprenticeship service account for review and approval. Treat employer approval as a visible dependency with an owner and due date.
2. Simplify the contract for services carefully
The contract can now operate at programme level rather than learner level, and no longer has to break the price into each eligible cost area. It must still state that apprenticeship funding will be used only for eligible costs. Learner-level prices continue through the ILR and apprenticeship service.
3. Reconfigure price-change approvals
The employer no longer needs to approve a different split between TNP1 and TNP2; it needs to approve a price change where the total price rises. This applies to new starts and to continuing learners where the price change occurs on or after 1 August 2026. Providers using a TNP2 estimate should also retain a credible source and keep the estimate current.
4. Strengthen off-the-job evidence ownership
The minimum off-the-job training volume for each standard is now found on the Skills England standard page rather than Annex C. Only eligible activity belongs in the actual-hours field, and standalone English and maths learning is not OTJ active learning. The main provider remains responsible for the evidence even where an employer or subcontractor delivers the activity. See the complete off-the-job training guide.
5. Add end-of-programme training-plan agreement
At the end of the programme, the employer, provider and apprentice must agree that the training-plan content has been delivered. The agreement can be recorded in the training plan or the provider’s gateway review. Add a three-party sign-off rather than relying on an internal completion flag.
6. Control alternative progress-review schedules
If an employer and provider agree a timetable other than the normal schedule, it must be agreed in advance and reviews must be no more than six months apart. Store the agreement with the learner plan and use automated alerts well before the six-month ceiling. Our progress reviews guide explains the evidence flow.
7. Lock the original ILR planned end date
The summary reminds providers that the original ILR planned end date must not be changed after submission merely because the apprenticeship agreement is extended. A break in learning and subsequent restart is the stated exception. Restrict edit permissions and log any permitted change.
8. Update English, maths and wage controls
Initial assessment must establish whether the apprentice will study a standalone English or maths qualification. Active learning needs accurate dates and must not be delivered entirely through self-directed distance learning. Separately, where a provider becomes aware that an apprentice is not being paid in accordance with National Minimum Wage regulations, the rules require withdrawal from the programme.
9. Add the new eligibility exceptions
New starters on the Level 2 Administration Assistant standard (ST1472) are fundable only where they are aged 16 to 24 at the start, including the stated summer-birthday exception for some 15-year-olds. The rules also clarify that an individual undertaking a government-funded Skills Bootcamp is not eligible for simultaneous apprenticeship funding. Build both checks into initial assessment.
Provider Checklist Before 1 August
| Owner | Action | Evidence of completion |
|---|---|---|
| Finance | Configure 25%, 5% and 0% pathways and above-band charges | Test invoices for all three scenarios |
| Commercial | Remove the future 10% levy top-up from forecasts | Approved calculator and proposal wording |
| MIS | Preserve rule version by learner start date and lock original planned end date | Data rule and exception report |
| Admissions | Add age, employer levy status, ST1472 and Skills Bootcamp checks | Revised initial-assessment checklist |
| Delivery | Update OTJ evidence, review scheduling and end-of-plan agreement | Templates, alerts and sample learner record |
| Employer team | Add apprenticeship-service record approval and PAYE validation prompts | Named owner and employer communications |
| Quality | Sample a new-start file from enquiry through first payment | Completed readiness audit with corrective actions |
A good readiness test is not “have we circulated the rules?” It is whether a team can take three otherwise identical learners, change only employer levy status and age, and produce the correct price, employer action, evidence list and ILR treatment every time.
Frequently Asked Questions
When do the 2026/27 apprenticeship funding rules apply?
Version 1 applies in England to apprenticeships starting on or after 1 August 2026. Earlier starts normally stay on their original rules, subject to the specific exceptions identified in the new document.
Is co-investment increasing from 5% to 25% for every employer?
No. The 25% rate applies to levy payers with insufficient apprenticeship-service funds. Non-levy employers pay 5% for apprentices aged 25 or over, while eligible apprentices aged 16 to 24 at non-levy employers are government-funded up to the band maximum.
What is the new £2,000 apprenticeship hiring payment?
It is an employer payment for eligible non-levy employers recruiting a new apprentice aged 16 to 24 for a practical period starting from 1 October 2026. Employment, PAYE, duration and continued-learning conditions apply, and the provider passes on two instalments.
What evidence should providers update before 1 August 2026?
Update pricing and co-investment evidence, age and PAYE checks, OTJ records, progress-review schedules, training-plan completion agreement, English and maths controls, and the employer approval workflow. Then test the full learner journey in your MIS rather than checking templates in isolation.
Sources & further reading
- Department for Work and Pensions - Apprenticeship funding rules and assessment plan guidance, 2026 to 2027 (Version 1, 15 June 2026) — Department for Work and Pensions - Apprenticeship funding rules and assessment plan guidance, 2026 to 2027 (Version 1, 15 June 2026)
- Department for Work and Pensions - official summary of changes, Version 1 — Department for Work and Pensions - official summary of changes, Version 1
- Department for Work and Pensions - full apprenticeship funding rules 2026 to 2027 (PDF) — Department for Work and Pensions - full apprenticeship funding rules 2026 to 2027 (PDF)
- Skills England - apprenticeship standards and published off-the-job training volumes — Skills England - apprenticeship standards and published off-the-job training volumes