Question 1

What is the Growth & Skills Levy?

Accepted Answer

The Growth & Skills Levy is the UK government’s updated approach to funding workforce training, replacing the traditional Apprenticeship Levy from 2026.

It builds on the existing levy system, where employers with an annual payroll above £3 million contribute 0.5% of their payroll into a digital account. These funds can then be used to pay for approved training.

From 2026, the levy becomes more flexible. In addition to apprenticeships, employers can use funds for shorter, modular training known as Apprenticeship Units, designed to address specific skills needs more quickly.

The reforms also introduce key changes, including faster expiry of funds (typically within 12 months), a stronger focus on priority skills, and updated funding rules for employers and SMEs.

For non-levy paying employers, government funding remains available, with SMEs able to access up to 100% funding for apprentices aged under 25.

Question 2

What are Apprenticeship Units?

Accepted Answer

Apprenticeship Units are a new form of government-funded training introduced under the Growth & Skills Levy from 2026.

They are shorter, modular programmes, typically lasting between 30 and 140 hours, allowing employers to develop specific skills more quickly than through a full apprenticeship.

These units will initially focus on priority skills areas such as leadership, engineering, construction and green technologies, including areas like AI leadership, EV charging, solar installation and technical trades.

Apprenticeship Units are available for employed learners aged 19 and over, with no standalone English or maths requirements, making them more accessible for both employers and learners.
They must be delivered by approved training providers who meet DfE quality and accountability requirements.

This added flexibility allows employers to use their levy funding in a more targeted and agile way, combining shorter skills training with longer-term apprenticeship programmes where needed.

Question 3

What can levy funding be used for?

Accepted Answer

Levy funding can be used for a wide range of apprenticeship programmes, helping employers develop skills across their organisation.

Common use cases include building leadership capability, developing specialist roles and supporting internal progression.

From 2026, the Growth & Skills Levy becomes more flexible, allowing funding to be used not only for full apprenticeship programmes but also for shorter, targeted training through Apprenticeship Units.

At Momentous Learning, we support employers with programmes including:

• Leadership and Management

• Hospitality

• International Freight Forwarding

• Youth Support Worker

This means employers can use levy funding to hire, upskill and retain talent, all while aligning training with business needs.

Question 4

How does the Growth & Skills Levy work?

Accepted Answer

Levy payments are collected through PAYE and transferred into an employer’s digital Apprenticeship Service account.

Employers can use these funds to pay for approved training with authorised providers. From 2026, this includes not only apprenticeships but also shorter, modular training known as Apprenticeship Units, designed to address specific skills needs more quickly.

Under the new Growth & Skills Levy, funds will expire faster, typically within 12 months, meaning employers need to plan and use their levy more proactively.

Question 5

Which employers have to pay the Growth & Skills Levy?

Accepted Answer

Only employers with an annual payroll exceeding £3 million are required to pay the Growth & Skills Levy.

However, employers of all sizes can benefit from government-funded training. Non-levy paying employers can access co-investment, where the government covers the majority of training costs.

From 2026, funding becomes even more accessible for smaller employers, with SMEs able to access up to 100% government funding for apprentices aged under 25.

Question 6

Can small employers benefit from the Growth & Skills Levy?

Accepted Answer

Yes. Small employers can benefit from the Growth & Skills Levy, even if they do not pay into it.

Through government co-investment, training costs are heavily subsidised, making apprenticeships a highly cost-effective option for developing staff.

From 2026, SMEs can benefit even further, with up to 100% government funding available for apprentices under 25, removing the employer contribution entirely in many cases.

This means small businesses can hire and develop new talent with minimal upfront cost.

Question 7

Can non-levy employers access apprenticeship funding?

Accepted Answer

Yes. Employers who do not pay the Growth & Skills Levy can still access government funding for apprenticeship programmes through the co-investment model.

Under this model, the government covers the majority of training costs, with employers contributing a smaller portion. From 2026, this is typically 75% government funding and 25% employer contribution once levy funds are not available.

In addition, SMEs can benefit even further, with up to 100% government funding available for apprentices aged under 25.

At Momentous Learning, we support non-levy employers by helping them:

• Identify the right apprenticeship programmes for their organisation

• Understand available funding and maximise co-investment opportunities

• Set up and manage their Apprenticeship Service account

• Recruit, pre-screen and select suitable candidates

• Deliver structured training and ongoing support throughout the programme

This means organisations of any size can invest in workforce development while keeping costs low and predictable.

Question 8

Can Growth & Skills levy funds be used for existing employees?

Accepted Answer

Yes. Growth & Skills Levy funding can be used to upskill existing employees, not just new hires.

Many employers use their levy to develop future leaders, strengthen management capability and create clear progression pathways within their organisation.

From 2026, the system becomes more flexible, with funding available for both full apprenticeship programmes and shorter, targeted training through Apprenticeship Units.

This allows businesses to quickly build the skills they need, while improving retention and long-term performance.

Question 9

Can Growth & Skills levy funds be transferred to another employer?

Accepted Answer

Yes. Levy-paying employers can transfer up to 50% of their annual Growth & Skills Levy funds to other organisations.

These transfers are often used to support smaller employers, supply chain partners, or local businesses that want to deliver apprenticeship programmes but do not have sufficient funding in their own Apprenticeship Service account.

The receiving employer can then use the transferred funds to pay for approved apprenticeship training and end point assessment.

Transferred funds must be agreed between the levy-paying employer and the receiving organisation and managed through the Apprenticeship Service.

As the levy system becomes more flexible from 2026, many employers are using transfers as part of a wider workforce and funding strategy.

At Momentous Learning, we work with employers and partners to identify suitable programmes, maximise available funding and ensure levy transfers are used effectively to support workforce development.

Question 10

What happens if levy funds are not used?

Accepted Answer

Levy funds will expire if they are not used.

Under the Growth & Skills Levy, funds typically expire within 12 months, meaning employers must plan and use their funding more proactively.

Any unused funds are returned to the government, which means employers can lose a significant portion of their training budget if it is not used in time.

This “use it or lose it” approach is one of the biggest changes in the 2026 reforms, making it more important than ever to have a clear training and workforce development plan in place.

Question 11

How can employers get started with levy funding?

Accepted Answer

Employers can get started by working with an approved training provider to plan how their Growth & Skills Levy funding is used.

With funds now expiring faster, taking action early is key to avoiding lost budget and making the most of available funding.

At Momentous Learning, we help employers:

• Plan the most effective use of their levy funding

• Identify the right programmes and workforce development pathways

• Recruit and select suitable candidates

• Set up and manage their Apprenticeship Service account

• Deliver structured, high-quality training

Whether you are looking to hire new talent or upskill your existing team, we can support you every step of the way.

👉 Speak to our team today to start planning your levy strategy.

UNDERSTANDING GROWTH & SKILLS LEVY

Helping Employers Make the Most of Their Funding.

WHAT IS THE GROWTH & SKILLS LEVY AND WHY IT MATTERS

MAKE THE MOST OF YOUR LEVY

HOW TO APPROACH LEVY FUNDING

Frequently asked questions