Skills Funding & Policy Update: What the 2026 Reforms Mean for Apprenticeships
The government is making significant changes to how skills and apprenticeship training is funded in 2026. These reforms will affect how large employers in the print and packaging sector manage their levy pots, what SMEs contribute towards training costs, and which apprenticeship standards remain publicly funded. Most changes are phased in between January and September 2026, and some are already in effect.
The overall direction of the reforms is clear: public subsidy is being redirected towards young people, the government’s priority skills, and faster use of levy funds. Larger employers will be expected to bear a greater share of the cost of later-career training.
Here is a summary of what is changing and when.
January 2026: Level 7 Restricted to Under-22s
Public funding for most Level 7 (master’s-level) apprenticeships is no longer available for new starters aged 22 or over. Exceptions apply for care leavers and those with an Education, Health and Care Plan (EHCP), up to age 25. This change, which came into effect at the start of 2026, is intended to shift funding away from higher-level, later-career programmes and towards earlier-stage routes.
April 2026: The Growth and Skills Levy and Apprenticeship Units
Renaming and Expanding the Levy
The Apprenticeship Levy has been renamed and expanded as the Growth and Skills Levy, and funds can now be used for shorter modular training as well as full apprenticeship standards.
A 50% rule applies: employers may allocate up to 50% of their annual levy funds to modular units, but at least 50% must be retained for full apprenticeship programmes. For example, an employer receiving £24,000 per year in levy funds can use a maximum of £12,000 of that on units.
Apprenticeship Units
Apprenticeship Units are short, modular programmes – typically 30 to 140 hours in length, delivered over 1 to 16 weeks. Initial topics include AI Leadership, EV Charging Installation, Electrical/Mechanical Fitting, Modular Building Assembly, Solar PV, and Welding, reflecting identified national skills gaps.
Eligibility: Employed learners aged 19 and over.
Funding:
- Large employers (levy payers): funded through the levy.
- SMEs, apprentice under 25: fully government-funded (100%). Note: this 100% government funding for under-25s in SMEs officially takes effect from 1 August 2026.
- SMEs, apprentice aged 25 or over: 95% government-funded; employer pays 5% co-investment.
Apprentice Minimum Wage Increase
From April 2026, the apprentice minimum wage rises to £8 per hour.
August 2026: Levy Funding Rules Change
Before the start of the 2026/27 academic year, four significant funding changes will take effect:
- Levy fund expiry reduced to 12 months. Levy funds will now expire after 12 months rather than 24, increasing the pressure on employers to use funds promptly or lose them.
- Government top-up removed. The 10% government top-up to levy contributions will end, reducing the public subsidy element of levy funding.
- Co-investment rate rises for levy payers. When levy funds are exhausted, the co-investment rate for large employers will increase from 5% to 25%, with government meeting the remaining 75% of costs.
- SME co-investment removed for under-25s. The current 5% co-investment requirement for SMEs hiring apprentices under 25 will be removed entirely, making training for this group 100% government-funded.
The government has stated these measures are designed to increase the pace at which levy funds flow into training, limit the build-up of unused balances, and rebalance the funding mix between government and large employers.
September 2026: Defunding of 16 Apprenticeship Standards
Sixteen apprenticeship standards will be closed to new starters from 1 September 2026. Among the most significant for employers in the print and packaging sector are:
- Team Leader / Supervisor (Level 3)
- Operations / Departmental Manager (Level 5)
These defundings sit within the broader policy shift to concentrate apprenticeship funding more strongly on young people and those at earlier stages of their careers. Employers wishing to start learners on either of these standards must do so before 1 September 2026.
Employer Incentives for Hiring Young People
Alongside the changes to co-investment rates and full funding for under-25s in SMEs, new cash incentives are being introduced to encourage employers to bring young people into their business.
£3,000 Youth Jobs Grant — from June 2026 (all employers)
Employers of any size will be able to claim £3,000 when they hire an eligible unemployed young person aged 18–24 through the Youth Jobs Grant route — for example, someone who has been on Universal Credit and out of work for a defined period. Where that hire is also taken on as an apprentice, this payment can be combined with the apprenticeship funding reforms.
£2,000 SME Apprenticeship Incentive — from October 2026
Small and medium-sized employers will be able to claim a £2,000 payment for each new apprentice aged 16–24 they recruit. This is in addition to fully funded training for under-25s in SMEs, and is intended to reduce the upfront cost of taking on young apprentices.
Summary of Key Changes
What This Means for Print and Packaging Employers
Early careers investment is now better supported than ever
Government support is increasingly concentrated at the early careers level. With training for under-25s in SMEs becoming fully government-funded, and additional cash payments available through both the SME apprenticeship incentive and the Youth Jobs Grant, employers in the print and packaging sector who want to grow their early careers pipeline will find the funding environment firmly in their favour. For businesses looking to recruit and train the next generation of operatives, technicians, and supervisors, now is a strong moment to act.
Support for higher-level and later-career training is reducing
The flip side of this early careers focus is a real reduction in support for higher-level training. Funding for Level 7 has already been removed for those aged 22 and over, and a number of higher-level standards — including Team Leader (L3) and Operations Manager (L5) — are being defunded from September. Employers with a clear need for these programmes should consider starting relevant learners as soon as possible. Waiting for the policy picture to stabilise could mean fewer options, not more.
Levy management requires urgent attention
From August 2026, the window for spending levy funds will halve from 24 to 12 months. At the same time, the 10% government top-up will be removed and the co-investment rate will rise sharply from 5% to 25% once funds are exhausted. Taken together, these changes could have significant cost and planning implications. Employers should review their training pipelines now to ensure funds are being committed effectively and that they are prepared for the higher costs that will apply when levy balances run out.
How BPIF Training Can Help
BPIF Training works with employers and learners in the print and packaging sector and is well placed to help you navigate these changes. Whether you are planning new starts, looking to maximise your levy spend, or exploring apprenticeships for young recruits, our team is here to support you.
Get in touch with the BPIF Training team to discuss your options.