The Skills & Growth Levy: what large employers need to know for April 2026

From 1 April 2026, the Apprenticeship Levy becomes the Skills & Growth Levy - the biggest shift in levy rules since 2017.  

The aim? More flexibility, more control, and more focus on real workforce needs. 

Here’s a clear breakdown of what’s changing and what it means for large employers. 

 

What is the Skills & Growth Levy? 

If your annual payroll is over £3m, you’ll continue paying the levy - but how you can use it is changing. 

The major change is flexibility. You’ll now be able to use levy funds for: 

• Full apprenticeships 

• Shorter, modular “apprenticeship units” aligned to specific skills. 

Think of it as your fund shifting from a single programme route to a broader skills investment pot. 

 

What’s changing on 1 April 2026? 

 

1. You can now fund shorter, targeted training 

Apprenticeship units let you upskill employees faster and more precisely. 

This matters because it means you can: 

• Fill skills gaps quickly 

• Build flexible learning pathways 

• Support fast-moving teams and project work. 

 

2. Levy funds will expire after 12 months 

The expiry window halves from 24 to 12 months. 

This will impact larger employers in a number of ways including: 

• Tighter planning cycles 

• Faster deployment of funds 

• Increased risk of losing unused levy. 

The upside: shorter units make it easier to use funds before they expire. 

 

3. The 10% government top-up is ending 

Levy pots will grow more slowly without the monthly top-up. 

This means you’ll need to 

• Adjust forecasting 

• Maximise value from every pound 

• Plan more proactively across the year. 

 

4. Levy transfer capacity increases to 50% 

You’ll be able to transfer up to half of your annual levy. 

This has a number of benefits to you including: 

• You can support your supply chain and local SMEs 

• You can strengthen recruitment pipelines 

• You can prevent levy underspend 

• You can fund both units and full apprenticeships. 

This is a major opportunity for employer-led social impact. 

 

5. Co-investment rises to 25% when your levy runs out 

If your levy balance is exhausted, your contribution increases from 5% to 25%. 

For employers, this means: 

• Overspend becomes costlier 

• Forecasting accuracy becomes critical 

• Many will want to use levy funds earlier in the year. 

 

6. Level 7 apprenticeships are restricted 

New Level 7 starts will only be available to those aged 21 and under. 

Implications: 

• Leadership and professional development pathways may need adjusting 

• Existing learners are unaffected 

• Programmes at Level 6 and below remain open to all. 

 

What This Means in Practice 

Opportunities from these changes include: 

• More flexible training options 

• Closer alignment with workforce needs 

• Stronger supply chain partnerships 

• More ways to avoid levy underspend. 

The change will also bring some new challenges, including: 

• Faster fund expiry 

• Loss of the 10% top-up 

• Higher co-investment risk 

• Level 7 restrictions. 

 

Final Thoughts 

The Skills & Growth Levy is a shift towards more control and more flexibility, but it also requires more active management. With the right planning, large employers can use these changes to strengthen talent pipelines, upskill teams quickly and make a wider impact across their organisation and communities. 

 

To find out more about apprenticeship funding and how your business can benefit, you can download ‘The Employers Guide to Funding’ here.  

You can also speak to one of our advisors by visiting the Employer Hub here.