The 2025 Budget has introduced significant changes to the apprenticeship funding landscape, particularly for levy-paying employers. Here’s what these changes mean for employers:
End of the 10% Top-Up: Levy contributions will no longer receive a 10% government uplift, meaning employers will have to plan their training investments more carefully.
12-Month Expiry Window: The window to spend levy funds has been halved from 24 months to 12 months, requiring employers to track their funds closely.
Higher Co-Investment Costs: Once levy funds run out, the co-investment rate will change, with the government covering 75% of the remaining training costs, up from 95%.
Free Training for Under-25s: SMEs will now fully fund apprenticeship training and assessment for employees aged under 25, removing a key barrier for youth participation.
New Opportunities: From April 2026, levy funds can be used on short, modular training courses called Apprenticeship Units, allowing for rapid upskilling in critical skills areas.
These changes aim to make apprenticeships more accessible and responsive to labour market needs, while also providing new opportunities for employers to invest in high-impact training.
Budget 2025: SME co-investment relief extended to under 25 apprentices
Written by Billy Camden 26 Nov 2025, 14:00, FE Week
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