Apprenticeship funding changes: a strategic guide for employers

Navigating the new apprenticeship funding landscape

Apprenticeships can be a powerful tool for developing talent, but recent changes to UK apprenticeship funding have left many employers with questions. As of 1 January 2026, a significant shift in government policy will reshape how businesses can use their apprenticeship levy, particularly concerning higher-level qualifications. 

This article provides a clear overview of the changes, and how Mindful Education’s flexible, hybrid training approach for professional apprenticeships can support employers in developing a strategic talent pathway and to continue maximising their investment in talent development.

Earlier this year, the government announced a major reform to apprenticeship funding, removing public funding for all new level 7 apprenticeship starts for learners aged 22 and older from January 2026. This means employers will no longer be able to use their apprenticeship levy to fund these master’s-level qualifications for a large portion of their workforce. The change aims to redirect resources towards younger learners and junior-level talent development.

While this change is significant, it is not a complete defunding. The government will continue to fund level 7 apprenticeships for:

• New apprentices aged 16-21 at the start of their programme
• Learners under 25 who are care leavers or have an Education, Health and Care Plan (EHCP)
• Apprentices who are already enrolled on a programme before the January 2026 deadline

For employers, this presents a clear choice: either self-fund level 7 qualifications for experienced staff, or pivot their strategy to focus on the levels where government funding remains robust.

When looking at training for professional services, such as management, business, HR, and accounting, the removal of Level 7 funding presents a strong case for refocusing your talent strategy on lower and mid-level apprenticeships (levels 2-5). These levels, which are still fully supported by government funding, offer a powerful and practical solution for skills development.

Financial efficiency: using levy funding for upskilling

While Level 7 apprenticeships focus on highly specialised training, levels 2-5 enable a broader upskilling strategy across your organisation. You can use your levy funds to develop essential skills across more of your workforce, strengthening your team’s overall capabilities and resilience. This strategy ensures you continue to reap the benefits of the full value of your apprenticeship levy without the need for additional investment.

How to maximise your training budget

Sustainable talent pipelines

Apprenticeships at levels 2-5 are designed to build a solid foundation of professional knowledge and skills. They are perfect for attracting new talent, upskilling existing junior staff, and creating a sustainable talent pipeline from entry-level to management roles. 

Apprenticeships such as the Level 4 Professional Accounting Technician and Level 5 Operations Manager Apprenticeship provide a clear, funded pathway for career progression. This approach helps address critical workforce challenges, including succession planning and staff retention.

Your talent, your way

One of the most powerful benefits of investing in apprenticeships at levels 2-5 is the ability to grow your own talent. By upskilling new or junior employees, you can train them in the exact skills and behaviours your business requires. This tailored approach allows you to:

• Address specific skills gaps: Apprenticeships enable employers to fill the knowledge, skills, and behaviours needed in the workplace. This means you can use them to directly address skills shortages in your business, ensuring new hires are trained in a way that is immediately relevant to their role.

• Embed company culture: Training an apprentice from the ground up allows them to be immersed in your company culture and processes from day one. They will learn to operate in a way that is aligned with your business values and objectives, fostering a sense of loyalty and understanding of your organisation’s unique way of working.

• Improve staff retention: Investing in apprenticeships shows your workforce that you are committed to their professional development. Employees who feel valued and see a clear path for career progression are more likely to stay with a company long-term. This can significantly reduce turnover rates and the associated costs of recruitment and retraining.

• Boost productivity and innovation: Bringing in fresh talent and new ideas can have a positive effect on your entire workforce. Apprentices often bring up-to-date knowledge and a different perspective, helping to drive innovation and encouraging more experienced staff to share their expertise, which in turn improves overall productivity.

At Mindful Education, we produce flexible blended learning courses and apprenticeships in professional subjects that make it easier for managers to develop their teams. Working hand-in-hand with employers and training providers, we ensure that off-the-job training is delivered in the most effective way for your business.

Our hybrid study method has been crafted to enhance workforce productivity from the very first day of an apprenticeship, and our award-winning virtual learning environment enables apprentices to incorporate online study seamlessly into their day-to-day work routine. 

On-demand access to our virtual learning environment means that apprentices can perfectly sync their studies with their work schedule. They also benefit from regular classes, either in-person or virtual, with an expert tutor from our network, who supports them to excel within their studies.

We work with leading training providers who deliver the tutor-led element of our apprenticeships, and we handpick the best regional or national provider for each employer to ensure their location and approach suits their needs.  

• Real-world application: Our courses use real-world examples which are relevant to the workplace, meaning your team can immediately apply what they’ve learned to their daily responsibilities. This practical approach allows line managers to delegate tasks more effectively, easing workloads while helping apprentices grow in their roles.
• A ‘roll-on, roll off’ approach: All our apprenticeships are structured to enable regular infilling into existing cohorts of learners, allowing employers to enrol team members at any time, without waiting for a specific start date, meaning that businesses can adapt swiftly to changing workforce demands and fill skill gaps as they arise.
• Understand learner progress: Mindful Education’s detailed analytics enable tutors and assessors to track learner progress, and easy-to-understand reports for line managers highlight where learners might need additional support or motivation. This ensures that learners are on track to achieve their professional qualifications, and your apprenticeship levy is being effectively utilised.
• There is no additional cost to employers for this enhanced level of training and support

Working in partnership with employers across the public, private and third sectors, we support thousands of learners each year, helping managers to develop their teams and grow their businesses.

The changes to Level 7 apprenticeship funding mark a new era for employers. While the decision may seem restrictive, it is an opportunity for employers to re-evaluate and strengthen their apprenticeship strategy. By strategically focusing on levels 2-5, businesses of all sizes can continue to build a skilled, motivated, and engaged workforce.

Our hybrid learning model provides the ultimate flexibility for both employers and learners, ensuring that businesses can not only adapt to these changes but also thrive within the new system.

If you’re interested in how Mindful Education’s flexible courses and apprenticeships in professional subject areas could benefit your organisation, download our employer brochure, or contact our Employer Engagement team: apprenticeships@mindful-education.co.uk.