New Apprenticeship Funding Changes: What You Need to Know
Big changes to apprenticeship funding come into effect from 1st August 2026, with further support available from 1st October 2026. If you run a nursery or early years setting, these changes could make a real difference to how you recruit and develop your team.
Why This Matters for Early Years
The early years sector is facing a well-documented recruitment crisis. Settings across England are struggling to fill roles, retain skilled staff, and compete with other sectors for young talent. These funding changes are a genuine opportunity to change that picture. Apprenticeships allow you to grow your own workforce, bringing in motivated young people and developing them into confident, qualified practitioners. With the new incentives now available, the financial barriers to doing so have never been lower. At the same time, widening access to apprenticeships for young people from all backgrounds means a broader, more diverse pool of candidates for your setting.
Training can be fully funded for 16–24-year-olds
From 1st August 2026, non-levy employers can receive 100% government funding for apprenticeship training and assessment for eligible apprentices aged 16–24.
This means you could train a new member of your team at no cost to your setting for the training itself.
A new £2,000 hiring grant
From 1st October 2026, eligible non-levy employers can receive a £2,000 grant when hiring a new apprentice aged 16–24. The grant is paid in two instalments.
You could receive up to £6,000 in grants
Depending on the apprentice and their circumstances, different grants can be combined:
And for eligible 16–24-year-olds at non-levy employers, training costs can also be fully funded.
Stack that alongside fully funded training and no employer National Insurance contributions for
apprentices under 25, and the cost of bringing a young person into your team drops considerably.
Extra support if your new hire receives Universal Credit
If you’re hiring someone aged 18–24 who has been claiming Universal Credit for at least six months, you may be eligible for a £3,000 employer grant. This is paid directly to you by DWP.
Support for Young People From Lower-Income Households
One barrier the government is actively working to address is the fairness gap that can exist for young people from lower-income families. In some cases, taking up an apprenticeship can affect household benefit income, which puts young people off applying even when the role is right for them. To tackle this, a targeted bursary is being introduced for eligible young people. It won’t change what you pay as an employer, but it should widen the pool of candidates able to say yes to your offer. Full details on eligibility and timing will be confirmed on GOV.UK, we’ll update this page as soon as they are published.
Have you thought about a levy transfer to cover your Co-Investment contribution?
If you’re a non-levy paying employer, you may be able to access funding transferred from a larger levy-paying employer. Large employers can transfer up to 50% of their annual levy pot to other businesses, which could cover your co-investment contribution entirely. Get in touch and we can arrange a demo to walk you through how this works.
Any changes for levy employers?
When a levy-paying employer’s apprenticeship funding runs out, a co-investment arrangement automatically kicks in. The levy employer will need to contribute 25% of any remaining training costs directly to the training provider, with the government funding the remaining 75%, this is to ensure the apprenticeship programme can continue without interruption.
Apprenticeship terminology is changing
You may also notice some new terminology from August, including:
> DAS → Apprenticeship Service
> EPA → Apprenticeship Assessment
> EPAO → Assessment Organisation
> Gateway → Gateway to Completion
Assessment can also begin from month 3 of an apprenticeship rather than being restricted to the end.
What does this mean for you?
Whether you have an unfilled role in your setting or a current member of the team who would benefit from a formal qualification, apprenticeship programmes are now designed to help nurseries bring in and develop new talent quickly.
If you’ve been thinking about taking on an apprentice but weren’t sure about the costs or the process, now is the time to explore your options. For eligible young apprentices, you could benefit from fully funded training alongside thousands of pounds in additional hiring support.
Find out more on the Apprenticeship Funding GOV.UK page or visit our website to see how we can support your setting.
Give us a call to discuss your training options, we’re here to help.