Apprenticeship Funding, Incentives and Costs

As an employer, you have access to funding to help cover the training costs of an apprenticeship.

If you are interested in exploring this option, Skills Edge can help you understand your funding options, determine which programmes are most suitable for your needs, and manage the administrative requirements to start the process.

Funding

The funding available for an apprenticeship will be dependent on the number of employees a business has and/or the age of the apprentice. Each apprenticeship has a total funding value in which the business may need to contribute towards.

Please see the section relevant to your organisation below for further details.

Organisation with 49 or fewer employees

The funding available would depend on the age of the apprentice:

16 to 18 years old – This apprenticeship would be fully funded by the Government with no cost to the business.
Aged 19 or over – The business would make a 5% contribution towards the apprenticeship (eg if the apprenticeship is valued at £9000, the business would make a contribution of £450+VAT).

The contribution is paid in one instalment prior to the apprentice commencing their programme. The business would also need to pay the wage of the apprentice as well as any exam and end point assessment resit costs.

The business can look to obtain funds from a levy paying employer which would mean this apprenticeship is a 100% funded, please see details on Apprenticeship Levy Transfer below.

Organisation with 50 or more employees

The business would make a 5% contribution towards the apprenticeship (e.g. if the apprenticeship is valued at £9000, the business would make a contribution of £450+VAT).

The business can look to obtain funds from a levy paying employer which would mean this apprenticeship is a 100% funded, please see details on Apprenticeship Levy Transfer below.

Apprenticeship Levy Payer (Organisations with a £3 million or more annual wage bill)

An organisation with an annual wage bill of £3 million or more will be subject to the apprenticeship levy, in which 0.5% of the annual wage bill will be paid into an apprenticeship levy via HMRC. The government will top these funds up by 10%, and they can be used exclusively on apprenticeship training. The funds expire on a 24-month rolling basis and are available on a ‘use it or lose it’ basis.

If your organisation pays the apprenticeship levy, you will pay the full value of the apprenticeship. E.g. if an apprenticeship is valued at £9000, you will pay this amount from your apprenticeship levy pot.

This is calculated by 20% of the value being reserved for final payment. The remaining 80% is divided by the total months of the programme, this value is paid in monthly instalments.

For example, a £9000 apprenticeship which lasts 18 months would typically result in:

17 monthly payments of £423.52
Final payment of £1800

If the business uses all of their apprenticeship levy funds, they can still enrol further apprentices but they would revert to government co-investment, in which the business would make a 5% contribution towards the apprenticeship (e.g. if the apprenticeship is valued at £9000 the business would make a £450 plus VAT contribution).

The business would also need to pay the wage of the apprentice as well as any exam and end point assessment resit costs.

For more information on the apprenticeship levy – Gov.UK Guidance

Apprenticeship Levy Transfer

The business can look to obtain funds from a levy paying employer. This would mean the apprenticeship is 100% funded, please see details on Apprenticeship Levy Transfer below.

Apprenticeship Levy Transfer

An organisation with an annual wage bill of £3 million or more will be subject to the apprenticeship levy, in which they will pay funds into their apprenticeship levy pot on a monthly basis. This levy can only be used on apprenticeships.

A levy paying organisation can use these funds to fund their own apprenticeship training but they can also transfer up to 25% of their apprenticeship levy to other businesses.

What this means for the receiving business, is that the apprenticeship would be 100% funded and they would not need to financially contribute towards this.

The receiving employer would still be responsible for the wage of the apprentice and for any additional costs such as exam and end point assessment resits or if the transferring levy organisations levy funds run out.

Click here to watch a video on how to view and apply for transfer opportunities.

Apply for levy funding today

Incentives

There are cash incentives that employers could be entitled to for hiring an apprentice. Read below to check your eligibility.

Age Incentive

Businesses will be eligible for £1000 incentive for enrolling an apprentice:

aged 16 to 18 years old
aged 19 to 24 with an education, health and care plan or who has been in the care of their local authority

This payment is made in 2 equal instalments for each apprentice. The first payment is due after an apprentice completes 90 days of their apprenticeship and the second is due after 365 days.

Costs

As well as the funding contribution listed above, there may also be additional costs that apply. Please see below for a breakdown of these costs:

Exam Resits – If the apprenticeship contains professional qualifications or functional skills, Skills Edge training will fund the first exam sitting. If the apprentice fails their exam, the business (in line with apprenticeship funding rules) would need to fund the resit.

CII Financial Services Exam Resit Costs
CII Insurance Exam Resit Costs
Functional Skills Exam Resit Costs

End Point Assessment Resit – All apprenticeships will contain an End Point Assessment, the first attempt is included as part of the funding. If the apprentice fails any element of their End Point Assessment, the business (in line with apprenticeship funding rules) would need to fund the resit.

End Point Assessment Resit Costs

Study Books – Apprenticeships that include professional qualifications may only provide apprentices with a digital study book. Employers will need to make a financial contribution if they would like the apprentice to receive the physical study book.

The typical cost to upgrade to a physical study book is £20 to £50 per unit.

CII Membership – If your apprentice is completing a Financial Services or Insurance apprenticeship, they will need to be a CII member. For those that have not been a paid member before, their membership will be funded through the CII Aspire Apprenticeship programme. If candidates have been a paid member before, or their current membership expires during the apprenticeship (excluding CII Aspire Apprenticeship membership), the business would need to fund the membership renewal.

CII Membership Fees

Out of Funding Support – If an apprentice goes beyond their planned end date, they will be classed as out of funding. Skills Edge can continue to support apprentices through to completion but additional charges may apply to continue this support. This will be discussed and agreed on a case by case basis.

Study materials (early leaver) – If an apprentice leaves the apprenticeship within the first 13 weeks of their programme, the business will be required to fund the cost of any study materials Skills Edge has purchased.

Typical costs range from £200 to £500 depending on the apprenticeship being completed.