End of £20k apprenticeship funding for over 21s

Jacob Grattage, Reporter, Business & Accountancy Daily Croner-i

An overhaul of apprenticeship funding will hit the accountancy profession hard when older trainees will no longer be able to access funding for Level 7 courses.

The final enrolment date for accountancy firms to sign up staff and trainees onto Level 7 accountancy apprenticeship courses is 31 December 2025 or firms will have to fund training costs of around £20,000 per head for any trainees aged over 21.

From 1 January 2026, the apprenticeship levy, which is being replaced by the growth and skills levy, will no longer fund apprentices aged 22 and over studying for advanced Level 7 qualifications, equivalent to a degree, including accounting and finance courses.

This hit to apprenticeship funding is likely to see increased pressure on companies to slow down on training and apprenticeships in the first quarter of 2026.

The funding cut off point comes at a time when organisations have faced soaring staffing costs along with the increase in employer national insurance since April.

When the government decided to redirect funding from Level 7 apprenticeships to prioritise construction and healthcare training, accounting firms warned that these changes would have a significant impact on training across the profession.

Based on removal of the current funding model, accountancy firms will have to pay up to £525m to fund these schemes. According to the Top 75 Firms Trainees survey, there were more than 25,000 trainees at the leading UK accountancy firms last year, up from 15,000 in 2014.

For example, in 2023, there were nearly 9,000 apprentices at the top six firms alone - Big Four plus BDO and Grant Thornton, an increase of more than 1,000 on the previous year.

Funding for apprentices aged between 16 and 21 will not be affected, along with any trainees who are currently studying and those enrolled before the January deadline.

A typical accountancy apprenticeship from BPP, one of the major training providers, costs £21,000 using the current levy system, which is 95% funded by government.

Young people’s interest in apprenticeships is higher than ever: in 2023, over 40% of UCAS applicants expressed an interest in apprenticeships.

Yet for every young person who secures an apprenticeship, three apply unsuccessfully, with many discouraged by a fragmented, duplicative and technically flawed application system, warned the Edge Foundation, in its Chaos to Coordination report on the perception of apprenticeships and ease of access.

Research by the Recruitment and Employment Confederation (REC) for the education charity also found that SMEs were unlikely to use apprenticeships, with too many barriers to provision and their participation in apprenticeships has been in sustained decline.

Nearly 70% of SMEs said that tailored advice on how apprenticeships could meet their skills needs would encourage them to take on a young apprentice — far outranking cash incentives or training support.

Alice Gardner, CEO, Edge Foundation, said: ‘Apprenticeships work but only if the system works for young people and for the small businesses that want to employ them. Right now, we have a generation eager to learn and contribute, and SMEs ready to grow their teams, yet both are being held back by unnecessary complexity and lack of support.

‘By creating a simple, joined-up system and ensuring every employer can access practical advice, we can unlock thousands of life-changing opportunities.’

Growing the use of apprenticeships is vital if the government is going to achieve its employment goals.

Kate Shoesmith, REC deputy chief executive, said: ‘It is essential if the government is to have any hope of hitting their overall target of 80% of people in employment. They could start by delivering the flexibility within the Growth and Skills Levy funding model promised pre-general election.

‘This would make apprenticeships and training more accessible for everyone. Employers tell us they want to take on apprentices, but many do not know about the support available or where to start. Simplifying the system would especially help smaller firms.’

The hit to apprenticeship funding will put increased pressure on companies to slow down on training and apprenticeships in the first quarter of 2026, warned Jemma Perks, managing director of the S&A Academy, which offers Level 7 management apprenticeships, starting at £14,000 if non subsidised.

‘The government’s decision to withdraw funding has a direct impact to both employer and employees across the banking and financial services sectors,’ said Perks.

‘The longer term impact for the banking and financial services sector will be felt in senior leadership roles with not enough talented future leaders coming through the executive leadership pipeline.’