At a glance
Short answerUK apprenticeship funding changes significantly in 2026: 16 standards are defunded from September, the Apprenticeship Levy becomes the Growth & Skills Levy in April, Level 7 is defunded for over-22s in January, levy expiry shortens to 12 months and co-investment rises to 25% from August. Non-levy 16–24s are 100% funded; 25+ still 5%. Exhausted levy co-invests 25% from August. This hub explains each change.

The six 2026 changes every employer should know

SEP 2026

16 standards defunded

Including Team Leader L3, Operations Manager L5 and Coaching Professional L5. New cohorts on defunded standards from September 2026 are not eligible for levy funding.

2026/27

Growth & Skills Levy

The successor to the Apprenticeship Levy. More flexibility to fund short courses and non-apprenticeship training alongside apprenticeships.

AUG 2026

Non-levy: 16–24 fully funded; 25+ still 5%

Non-levy employers: apprentices aged 16–24 are 100% funded. Age 25+ still pay 5% (government 95%). From August 2026, levy employers with exhausted funds co-invest 25%.

LIVE

AI & Automation Practitioner L4

ST1512, £18,000 band, 15 months, no coding. The fastest-growing standard in the UK. TESS bundles up to 5 accredited qualifications, no competitor matches that.

ONGOING

Off-the-job stays at 6 hours/week

The 6-hour minimum is a funding rule, not a guideline. Compliance failures can trigger funding clawback. Build it into the line manager's calendar from day one.

AUG 2026

12-month levy expiry

Unused levy in the digital account now expires after 12 months (was 24). Use it or lose it. Set a quarterly finance alert, we see mid-sized employers lose £40k-£120k/year to expiry.

16 standards defunded

Here's what was withdrawn, why, and what replaces it.

From 1 September 2026, 16 apprenticeship standards lost levy funding. The most widely-used programmes affected are Team Leader Level 3, Operations Manager Level 5, and Coaching Professional Level 5, between them accounting for tens of thousands of active apprentices across the UK.

Anyone enrolled on a defunded standard before September 2026 can normally continue to completion. New cohorts on these standards after the cut-off date are not eligible for levy funding. Employers planning cohort starts in summer 2026 with the intention of re-enrolling in October should rethink, once a standard is withdrawn, new enrolments stop.

Why this matters for you If your 2026 L&D plan includes Team Leader L3 or Operations Manager L5, you need a Plan B. For Team Leader L3, TESS's Data-Driven Team Leader L3 (ST0795) is the direct replacement, same funding band, same leadership core, updated for modern data and AI skills. For operations leadership, the AI for Operations Leaders L4 is a future-proofed alternative.

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The Growth & Skills Levy

What the successor to the Apprenticeship Levy actually changes.

Announced as the 2026 replacement for the Apprenticeship Levy, the Growth and Skills Levy is designed to give employers more flexibility with their levy spend. The headline shift: short courses and non-apprenticeship training become fundable alongside apprenticeships. The final policy detail is still being consulted on, but the direction of travel is clear.

For employers who've struggled to spend their full levy on apprenticeships alone, particularly those with distributed teams, project-based workforces, or rapid skill-change needs, this is a material change. It also means providers who offer both apprenticeships and short courses (like TESS) will have a natural advantage in the transition.

What to do now: model the impact on your 2026/27 spend. How much unspent levy expires? How many short courses would you fund if you could? Get this on your exec agenda before the detailed rules drop.

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Non-levy and exhausted-levy funding (Aug 2026)

Age bands and co-investment rates employers actually need.

For non-levy employers: apprentices aged 16–24 are 100% funded. Apprentices aged 25+ still attract the 5% employer / 95% government co-investment. Do not promise a single “under-25 = free” rule without the 16–24 cut.

From August 2026, levy-paying employers whose digital account is exhausted co-invest 25% (government 75%) on new starts. Never quote an employer’s unseen levy balance as if it were confirmed.

Practical impact A non-levy employer hiring four 22-year-olds on AI & Automation Practitioner L4 pays £0 co-investment. The same four at age 28 still cost 5% of the band. An exhausted-levy employer pays 25% from August 2026.

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The 2026 timeline

The key dates to put on your L&D and finance calendars.

Now – Apr 2026
Audit your current apprentice cohorts.Identify anyone on a defunded standard. Confirm completion pathway with your provider.
Aug 2026
12-month levy expiry + 25% exhausted-levy co-investment.Unused funds expire faster. Exhausted levy accounts co-invest 25%. Non-levy: 16–24 at 100%; 25+ still 5%/95%.
May – Aug 2026
Last window for new enrolments on defunded standards.Only if your provider can guarantee a completion pathway. Otherwise, choose a replacement.
Sep 2026
16 standards lose funding.No new levy-funded cohorts on defunded standards.
Oct 2026 onwards
Growth & Skills Levy phases in.New spending flexibility. Review 2026/27 L&D allocation.
Rolling
12-month levy expiry clock.Set quarterly finance alert. Recover before the shorter window closes.

What to do this quarter

Five concrete actions. None of them take more than an afternoon.

Get ahead of September 2026.

Download the 8-page Levy Readiness Checklist. Tick what's done, action the rest.

Download the checklist (PDF) Book a 30-min review

Frequently asked questions

The six questions we hear most often from employers.

Which apprenticeship standards lost funding in September 2026?
16 apprenticeship standards lost funding from September 2026, including Team Leader Level 3, Operations Manager Level 5, Coaching Professional Level 5, and 13 others. Learners already enrolled before the cut-off date can usually continue. New cohorts on defunded standards from September 2026 onward are not eligible for levy funding.
What is the Growth and Skills Levy?
The Growth and Skills Levy is the 2026 successor to the Apprenticeship Levy. It gives employers more flexibility to fund short courses and non-apprenticeship training alongside apprenticeships. Exact rules are being finalised but the direction is clearer spending choice for levy-paying employers.
How does non-levy and exhausted-levy funding work from August 2026?
Non-levy employers get 100% funding for apprentices aged 16-24. Age 25+ still pay 5% (government 95%). From August 2026, levy employers with an exhausted digital account co-invest 25%. Levy employers with available funds still draw 100% from the account until it is exhausted. Never quote an unseen levy balance.
Can I still enrol on a defunded standard?
No. New starts on the 16 defunded standards cannot be levy-funded from September 2026. Map the need to a currently funded standard such as AI & Automation Practitioner Level 4 (ST1512) instead.
What replaces Team Leader Level 3?
TESS Group's Data-Driven Team Leader Level 3 apprenticeship (ST0795) is the direct replacement, covering leadership, team management and modern data and AI skills including Power BI. The funding band is £12,000 and cohorts start monthly.
Does the AI & Automation Practitioner Level 4 need coding?
No. ST1512 is explicitly designed for non-technical staff in finance, HR, operations, marketing and customer service. The programme uses low-code and no-code tools. The skills focus is on automation, prompt engineering, data literacy and governance, not software engineering.