Myth-buster #2: Training is funded and comes at no cost to the employer
Posted on: 10th Apr 2025
Feature 
More than £3.5bn is raised by the apprenticeship levy each year – a tax paid by employers with an annual payroll exceeding £3m to fund training for vocational qualifications.
The levy was introduced exactly eight years ago, with approximately 2 per cent of businesses contributing towards its pool of funds.
What an alarming number of SMEs and charities aren’t aware of is the topic of our second myth-buster article:
Apprenticeship training is funded for ALL employers, with training for almost all programmes funded in its entirety
In the second of our series of myth-busting blogs, we uncover the true cost to employers for apprenticeship training. Spoiler alert, it’s not as much as you might assume!
Apprenticeship levy in 30 seconds
The apprenticeship levy was established to create a long-term, sustainable, funding model for apprenticeship delivery and provide employers with more control over training options.
Although SMEs and charities with a wage bill under £3m do not contribute towards the levy, this does not mean they cannot access funds to cover training costs.
This effectively means apprenticeships are a funded way for employers to:
- Upskill their teams and invest in the future
- Provide on-the-job training in a supportive working environment
- Increase staff morale and boost retention rates
Use it, or lose it
In 2023, FE News reported that £418m of funds raised via the apprenticeship levy wasn’t allocated to training.
That’s enough money to cover training costs for 35,000 apprenticeships.
In simple terms, the amount of money being paid into the apprenticeship levy right now does not match-up to funds being spent on training. The pool of funds is there, it’s up to employers to make the most of it.
Why is training free?
Right now in the UK, there is a critical skills shortage.
More than one in three vacancies are as a direct result of skills shortages – eight years ago, that same figure was one in five. The message is clear, the Government wants employers to invest in apprenticeship training for new and existing staff to address these skill gaps.
It has committed to a major apprenticeship reform which will see the requirement for apprentices aged 19 or older to achieve (if they haven’t previously obtained a pass) a Level 2 English and maths qualification scrapped.
The minimum length of some apprenticeships could also be reduced from 12 months to eight. Combined, it is hoped the move will mean up to 10,000 more people will complete an apprenticeship each year.
Costs to consider
There are some minor costs for employers to consider when choosing to invest in apprenticeships which we’ve outlined below.
New employees
- Wage: The current minimum wage for apprentices is £7.55 per hour.
- Setup costs: Apprentices are likely to require new equipment or uniform to fulfil their role.
Employers should note the Government currently operates a £1,000 bonus scheme to help cover the above costs for all apprentices aged 16-18 and those aged 19-24 with an EHC plan or that have been in care.
Existing employees
- Training costs: A small number of apprenticeship require employers to contribute 5 per cent of training and assessment costs. This can very between £350 to £600 per apprentice, depending on the course.
Before committing to an apprenticeship, our team of experts can talk each employer through these costs and how additional funding can be unlocked in detail.
Get in touch!
So there you have it!
Develop a motivated and satisfied workforce, help your colleagues learn skills relevant to their roles and boost employee retention – all via funding from the apprenticeship levy.
If you would like to learn more about any of Ignite Training’s apprenticeship programmes, simply drop our friendly team a message today. Our standards cover leadership and management, teaching, coaching, content creation and more.
Email: hello@ignitetraininguk.com
Call: 0300 303 0890
We look forward to hearing from you!
