Growth & Skills Levy Explained What Employers Need to Know
From 2026, the Apprenticeship Levy will evolve into the Growth & Skills Levy, introducing greater flexibility in how employers can use funding, while also increasing the urgency to use it effectively. For employers, this presents both opportunity and risk. Used effectively, levy funding supports hiring and upskilling. If not, it may be lost.
Key Changes to Levy Funding in 2026
The new Growth & Skills Levy introduces several important changes that employers need to be aware of.
Greater Flexibility Through Apprenticeship Units
One of the most significant changes is the introduction of Apprenticeship Units.
These are shorter, modular training programmes, typically lasting between 30 and 140 hours, allowing employers to develop specific skills more quickly than through a full apprenticeship.
Apprenticeship Units will initially be available in priority skills areas including:
AI leadership
EV charging installation
Modular building assembly
Solar PV
Welding
Electrical and mechanical fitting
They are available for employed learners aged 19 and over and do not require standalone English or maths, making them more accessible for both employers and learners.
These units must be delivered by approved training providers who meet DfE requirements and have no funding restrictions or risk indicators.
Faster Expiry of Levy Funds
Another major change is the reduction in how long levy funds remain available.
From August 2026, new funds entering employer accounts will expire after 12 months if they are not used.
Existing funds (those added before 31 July 2026) will continue to follow the previous rules and expire after 23 months, with the oldest funds being used first.
This significantly increases the “use it or lose it” pressure on employers and makes forward planning essential.
Changes to Funding and Contributions
The reform also introduces important changes to how training is funded:
The 10% government top-up will be removed
Once levy funds are used, co-investment for levy-paying employers increases to 25% (with government funding 75%)
SMEs benefit from improved access, with 100% government funding available for apprentices aged under 25
These changes make it even more important for employers to understand how funding works and how to maximise its value.
Levy Transfers and Collaboration
Levy-paying employers can continue to transfer funding to other organisations.
Employers can transfer up to 50% of their annual levy funds to other employers, including supply chain partners and Flexi-Job Apprentice Agencies (FJAAs).
This allows larger organisations to support smaller businesses and strengthen workforce development across their wider network.
What This Means for Employers
The shift to the Growth & Skills Levy requires a more strategic approach.
Employers will need to:
Use funding more quickly before it expires
Decide where to invest in hiring versus upskilling
Take advantage of both apprenticeships and shorter training options
Align training with priority skills and business needs
Organisations that act early will be able to maximise funding and build stronger, future-ready teams.
Those that delay risk losing funding or missing opportunities to develop their workforce.
How Employers Can Make the Most of Levy Funding
To get the most from the new system, employers should focus on three key areas:
1. Plan Early
With funds expiring faster, early planning is critical.
2. Align Training to Business Needs
Training should directly support operational goals and workforce priorities.
3. Use Flexible Training Options
Combining apprenticeships with Apprenticeship Units allows organisations to balance long-term development with immediate skills needs.
How Momentous Learning Can Support
At Momentous Learning, we work with employers to turn levy funding into practical workforce solutions.
We support organisations to:
Identify the most suitable training pathways
Maximise available funding and avoid unused levy expiring
Recruit, pre-screen and select suitable candidates
Set up and manage Apprenticeship Service accounts
Deliver high-quality, structured training
Whether you are looking to hire new talent or upskill your existing team, we help ensure your levy funding delivers real business impact.
In Conclusion
The Growth & Skills Levy is more than a policy change, it is an opportunity to rethink how you invest in your workforce.
With shorter funding windows and new flexible training options, the organisations that act early will gain the most value. Those that delay risk losing funding and falling behind on skills development.
Now is the time to take a more strategic approach.
Speak to Momentous Learning to explore how your levy funding can support hiring, upskilling and long-term workforce growth.
