Apprenticeship funding helps businesses train employees at a fraction of the cost, while individuals gain skills without taking on debt. Here’s what you need to know:
- What it covers: Training and assessment costs for apprenticeships, especially in high-demand fields like digital IT (e.g., software development, cybersecurity, data analysis).
- Who qualifies: Employers of all sizes and individuals aged 16+ who meet residency and eligibility requirements.
- Funding models: Larger employers contribute through the Apprenticeship Levy, while smaller businesses benefit from co-investment (95% of costs covered by the government).
- Key updates for 2025:
- Minimum apprenticeship duration reduced from 12 to 8 months (from 1 August 2025).
- English and maths requirements optional for apprentices aged 19+ in some roles (from 11 February 2025).
- Foundation apprenticeships focus on young learners (16–21) as a pathway into advanced training.
- Incentives for employers: Up to £3,000 for hiring eligible apprentices, plus National Insurance savings for apprentices under 25.
This funding system addresses skills shortages, especially in digital IT, while supporting businesses and apprentices alike.
Who Can Get Digital IT Apprenticeship Funding
Requirements for Apprentices
To qualify for a digital IT apprenticeship, applicants must meet a set of eligibility criteria. First and foremost, they need to be at least 16 years old and not currently enrolled in full-time or part-time education. Interestingly, holding prior qualifications, including university degrees, does not prevent someone from applying.
Residency requirements depend on nationality and immigration status. British and Irish citizens, as well as those with the right of abode, must reside in the UK. Non-UK nationals, on the other hand, must have lived in the UK for at least three years, and this residency should not be solely for educational purposes. For EEA nationals under the EU Settlement Scheme, the residency rule extends to three years in the UK or the EEA. Certain immigration statuses, such as refugee status, humanitarian protection, or leave to remain under specific schemes like those for Ukraine or Afghanistan, require only proof of ordinary residency since the leave was granted.
For foundation-level digital IT apprenticeships, there are additional age restrictions. These Level 2 programmes, such as the "Software and Data Foundation Apprenticeship" and the "Hardware, Network and Infrastructure Foundation Apprenticeship", are typically open to individuals aged 16 to 21 at the start of the apprenticeship. Exceptions to this age range are outlined in the Department for Education Apprenticeship funding rules.
These criteria provide the groundwork for upcoming changes to funding rules.
Changes Starting August 2025
From 1 August 2025, several adjustments will be introduced to make apprenticeship funding more flexible and accessible. One key change is the reduction in the minimum apprenticeship duration, which will drop from 12 months to 8 months.
Another significant shift involves English and maths requirements for apprentices aged 19 and over. From 11 February 2025, these exit requirements will become optional, acknowledging that some technical roles may not demand these specific qualifications.
Additionally, foundation apprenticeships will play a larger role. These Level 2 programmes combine employability skills, technical training, and English/maths support, targeting those aged 16 to 21. They are designed as a stepping stone to higher-level apprenticeships and eventual full-time roles in the digital IT sector.
These updates align with the Government’s Growth and Skills Levy initiative, which seeks to offer greater flexibility to both apprentices and employers. Anyone planning to start an apprenticeship from 1 August 2025 should refer to the 2025–2026 apprenticeship funding rules for the most up-to-date eligibility details.
How to Access Government Funding
How Employers Register for the Apprenticeship Service
The Apprenticeship Service is the go-to platform for managing government-funded apprenticeship programmes in England. To access funding and oversee apprenticeships, employers must first create an account on this service.
The registration process starts on the official Apprenticeship Service website, where employers select "Create account." During registration, they need to provide essential details such as their Companies House registration number, primary contact information, and PAYE scheme reference. If the business operates across multiple locations, each site should be listed.
Once registered, employers gain access to a user-friendly dashboard. This dashboard allows them to post apprenticeship vacancies, connect with approved training providers, and track their funding allocations. It also simplifies the process of setting up digital IT apprenticeships by enabling direct communication with training providers. Employers should ensure their payroll details are accurate, as this information directly influences funding calculations and levy contributions.
The dashboard also provides a detailed breakdown of funding allocations, including levy contributions and co-investment options, helping employers manage their apprenticeship budgets effectively.
How the Apprenticeship Levy and Co-Investment Work
The funding system for apprenticeships varies based on the size of the employer and their payroll. For businesses with an annual payroll exceeding £3 million, the Apprenticeship Levy applies. This levy is calculated at 0.5% of the total payroll, and employers receive a £15,000 annual allowance on top of their monthly levy contributions. These funds are stored as digital vouchers and can be used to pay for apprenticeship training.
Here’s an example: A company with a £5 million payroll would contribute £25,000 annually to the levy (5,000,000 × 0.5%) and receive the £15,000 allowance. This gives them £40,000 to spend on apprenticeships. However, it’s important to note that unused funds expire after 24 months.
For employers not subject to the levy, funding is provided through the co-investment model. Under this arrangement, the government covers 95% of training costs, while employers pay the remaining 5%. For instance, a Level 4 Data Analyst apprenticeship costing £18,000 would require a non-levy-paying employer to contribute £900, with the government funding the remaining £17,100.
With these funding models in mind, employers must ensure they meet the necessary requirements and deadlines to secure their funding.
Required Documents and Deadlines
To successfully apply for funding, employers need to submit specific documents within set timeframes. Two key documents are the apprenticeship agreement and the commitment statement, both of which must be completed before training begins. These documents outline the apprentice’s learning goals, expected outcomes, and the employer’s role in providing relevant work experience.
The apprenticeship agreement should include the apprentice’s start and end dates, details of off-the-job training (typically at least 20% of working hours), and job role requirements. For digital IT apprenticeships, this might involve access to relevant software, hardware, and project opportunities that align with the apprenticeship standard.
Apprentices themselves must also provide documentation to prove their eligibility. This includes proof of age, residency status, and the right to work in the UK. EU nationals may need to submit evidence under the EU Settlement Scheme, while individuals with refugee status should provide documentation confirming their immigration status.
Employers should share these documents with training providers well in advance to avoid delays. Once training begins, employers are responsible for submitting monthly data returns via the Apprenticeship Service platform. These returns confirm apprentice attendance, progress, and any changes in employment status, ensuring funding is released without interruption.
Lastly, booking the end-point assessment requires careful planning. Employers should schedule this assessment at least three months in advance, though certain digital IT standards may require even longer due to limited assessor availability. Coordinating with training providers can help align assessment dates with project completion and workplace readiness.
Types of Financial Support Available
Financial Incentives for Employers
Employers can benefit from a £2,000 incentive when they hire eligible apprentices participating in Foundation Apprenticeships across sectors like digital, construction and the built environment, engineering and manufacturing, or health and social care. Additionally, there’s an extra £1,000 available for hiring apprentices aged 16–18 or those aged 19–24 who either have an Education, Health and Care Plan or have been in care.
On top of these incentives, employers don’t have to pay National Insurance Contributions for apprentices under 25, which helps to further minimise costs.
These financial benefits are designed to work alongside other funding options available for employers in the digital IT sector.
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Employers & training providers: Apprenticeship Funding Rules 2025/2026
Apprenticeship Funding Changes for 2025–2026
The 2025–2026 apprenticeship funding updates bring fresh opportunities and adjustments for employers and apprentices in the digital IT sector. These changes aim to expand access to training while maintaining high standards across apprenticeship programmes. They build on earlier discussions around funding by refining how modern digital skills are delivered and who qualifies for these programmes.
Foundation Apprenticeships: A New Starting Point
One of the key updates is the introduction of Foundation Apprenticeships. These entry-level programmes are designed to create accessible routes into advanced training, particularly for individuals who may not have taken traditional paths into technology careers. By addressing existing skills gaps, these apprenticeships aim to open doors for a broader range of talent. Employers are also incentivised financially, making it easier for businesses to invest in workforce development through these programmes.
Flexible Off-the-Job Training
Changes to off-the-job training requirements provide more flexibility without compromising quality. Recognising the dynamic nature of the digital IT workplace, the revised framework allows for more adaptable training methods. Employers are encouraged to blend traditional learning with hands-on projects, ensuring apprentices gain practical, real-world experience that aligns with industry needs.
Full Funding for Priority Groups
The government remains committed to breaking down financial barriers to apprenticeship opportunities. Full funding will continue to be available for specific groups, with a strong focus on promoting diversity and inclusion within the digital sector. This approach not only supports apprentices but also helps smaller employers access valuable training resources without financial strain.
Together, these updates refine the existing funding framework, catering to the diverse needs of employers and apprentices while ensuring the digital IT sector continues to thrive.
Conclusion
Apprenticeship funding plays a crucial role in supporting both employers and apprentices in the digital IT sector. The updates introduced in August 2025 have made these programmes more accessible and adaptable, offering a stronger foundation for everyone involved.
One standout development is the introduction of Foundation Apprenticeships, which specifically target young people aged 16–21. These programmes not only address the ongoing skills shortage in the digital sector but also provide meaningful entry points for early career development. Employers can benefit from financial incentives, while the increased flexibility in delivering off-the-job training makes these apprenticeships an even more attractive option.
Smaller businesses, in particular, gain from substantial government funding, and additional support is available for apprentices with Education, Health and Care Plans. Employers should ensure their apprenticeship service accounts are up to date and align their recruitment strategies with the latest incentive schemes. Meanwhile, individuals considering an apprenticeship should explore their eligibility and the range of support available to them.
Success in this area depends on staying informed about annual funding updates and planning with a clear strategy in mind. This approach is especially important as the digital IT sector continues to evolve at a rapid pace.
FAQs
How can businesses check if they qualify for the Apprenticeship Levy or government co-investment funding?
Businesses are required to pay the Apprenticeship Levy if their annual payroll exceeds £3,000,000. This levy isn’t just a tax; it’s a resource that can be used to cover the costs of apprenticeship training, helping companies invest in their workforce.
For businesses with a payroll below this threshold, there’s an alternative funding option called co-investment. With this scheme, smaller employers contribute a small percentage of the training costs, while the government takes care of the rest. This approach ensures that apprenticeship training remains within reach for smaller businesses.
To determine your eligibility and learn how to access these funds, it’s a good idea to review your payroll size and consult the government’s apprenticeship funding guidelines.
What benefits do employers gain from hiring apprentices under the 2025 funding updates?
Employers across the UK stand to gain from the 2025 apprenticeship funding updates, which bring several advantages. Among these is a £1,000 payment for businesses that hire apprentices aged 16–18. Smaller employers can also benefit from funding that covers anywhere between 95% and 100% of training costs, easing the financial burden of apprenticeship programmes.
On top of that, businesses with an annual pay bill below £3 million are not required to pay the apprenticeship levy, making the process even more affordable. These updates aim to break down financial barriers, encouraging more employers to embrace apprenticeships as a way to build and strengthen their workforce.
How do changes to English and maths requirements impact access to digital IT apprenticeships for older candidates?
Starting February 2025, new guidelines for digital IT apprenticeships in the UK will no longer require apprentices aged 19 and over to hold English and maths qualifications at the start of their training. This means older apprentices won’t need to achieve Level 2 English and maths qualifications to complete their programme.
The goal of this change is to make apprenticeships more accessible for adults looking to upskill or switch careers into the digital IT sector. By removing this barrier, more individuals will have the chance to pursue opportunities in tech without the added pressure of meeting specific literacy and numeracy requirements. This adjustment aims to open doors for a broader range of people to build successful careers in the growing tech industry.
