The growth and skills levy: An autumn update
There have been a number of changes throughout 2025 in the world of apprenticeships and skills, making it hard for employers to stay up to date. We have therefore provided a recap of the key changes for businesses.
Understanding the apprenticeship levy
Introduced in 2017, the apprenticeship levy is automatically paid monthly at 0.5% of your payroll. This ring-fenced funding is exclusively for apprenticeship training. Crucially, if the funds are not spent within two years, they are retained by the government as tax.
New and improved apprenticeship standards
Apprenticeship standards have undergone significant review in recent years to ensure they provide training programmes that genuinely meet employer needs. The upshot is that many apprenticeships are now shorter and more streamlined, with the minimum duration for apprenticeship programmes reduced from 12 months to eight. Many standards now also include professional qualifications as a key element of study. End-point assessments are also being rewritten to be simpler, enabling employers to sign off when workplace behaviours have been met. If you’ve previously considered standards that weren’t the right fit for your organisation, it’s worth reviewing the updated versions.
The growth and skills levy
In October 2025, the government’s post-16 education and skills whitepaper was published. This included the first expansion of the apprenticeship levy, which has been renamed the ‘growth and skills levy’ under the new Labour government. The intention is to allow employers to utilise new shorter training courses or ‘apprenticeship units’ from April 2026. Initially, these apprenticeship units will only be available in specific areas: AI, digital, and engineering. You can find out more here.
Functional skills and age-related changes
Other significant changes include the removal or optional nature of functional skills (English and maths requirements) for apprentices aged over 19. This has greatly assisted employers in supporting upskilling opportunities while also helping apprentices to complete their programmes.
For younger apprentices, no national insurance costs are payable, making apprenticeship programmes a cost-effective way to recruit and develop entry-level talent within your organisation. Additionally, foundational apprenticeships will offer financial incentives for employers to support young people on these programmes.
Changes to Level 7 funding
Perhaps the most controversial change to the apprenticeship levy is that from January 2026, Level 7 programmes will no longer be funded for any learner over the age of 22. This effectively applies to anyone eligible for a Level 7 programme. This change will significantly impact organisations that have previously utilised these programmes for their apprenticeship strategies, as the funding will now be available for them to spend in other areas—or it will be retained by the government as tax. The aim of this change is to increase apprenticeship starts at lower levels and support younger apprentices.
Read more about Level 7 changes and how they impact your organisation here.
Mindful Education’s approach
At Mindful Education, we focus on professional apprenticeships at Level 2-5, collaborating with organisations to support talent development opportunities across their teams. Apprenticeship programmes are available to support most business priorities, including building leadership capabilities, early careers development, and career planning.
Mindful Education supports NHS Trusts, local authorities, housing associations, government bodies, and other public sector organisations in delivering flexible management, accounting, HR, legal, and business apprenticeships. All our programmes offer the option to include a professional qualification, such as CIPD for our HR apprenticeships.
To discuss how to maximise your apprenticeship levy funds in light of the above, please get in touch – we’d be happy to create a bespoke professional apprenticeships plan for your organisation: apprenticeships@mindful-education.co.uk
Katherine leads on promoting our award-winning, professional apprenticeships to employers across the UK and works closely with our partners on joint employer outreach and sales initiatives.
