Funding explained
How AI apprenticeship funding works in the UK
Apprenticeship training in England is paid for through the government’s apprenticeship funding system. The way the funding works is different depending on whether you’re an individual thinking about doing an apprenticeship, or an employer looking to train your team. This page covers both, so jump to whichever fits you.
If you take one thing from this page: as an individual learner you never pay the apprenticeship levy, you never co-invest, and you pay no tuition fees. Those are all things that happen on the employer and government side. Your side is simple.
What funding means for you as a learner
If you’re employed and want to do an apprenticeship to build your skills, the funding side is genuinely straightforward. The cost of your training is covered for you, and here is exactly what that means in practice.
You pay no tuition fees
The cost of your training and end-point assessment is met through the government’s apprenticeship funding system. It is paid for on your behalf, either from your employer’s apprenticeship funds or by government funding. You do not receive a bill, you do not pay the levy, and you do not contribute towards the course cost. “Fully funded” means fully funded for you.
You keep your salary
This is upskilling within your existing job, not an unpaid placement or a return to being a student. You stay employed on your normal salary the whole way through. The apprenticeship funding only ever covers training, never wages, so nothing about your pay changes.
You get dedicated learning time
You are entitled to time within your working week for study, agreed with your employer, in line with the government’s off-the-job training requirement. Much of that learning is applied to real projects in your own role, so it doubles as work you would be doing anyway.
The one thing you need: your employer on board
Because apprenticeship funding is arranged through the employer, you do need your employer’s agreement to get started. That is the only real requirement on your side, and if your employer isn’t signed up yet, it’s completely normal. An advisor helps you approach them and explains how little, or nothing, it costs the business.
In short: no tuition fees, no levy, no co-investment, salary intact. The only box to tick is your employer agreeing to support the apprenticeship, which is something we help with.
Ready to apply?
The Level 4 AI & Automation Practitioner apprenticeship is fully funded for eligible learners. Apply and an advisor will confirm your eligibility and next steps on a quick, no-obligation call.
See the course and applyHow apprenticeship funding works for employers
This is where the levy, co-investment and funding rules come in. If you’re an employer, the training cost is met by a combination of your own apprenticeship funds and government funding, and how that splits depends on your size and, in some cases, the apprentice’s age. Funding rules changed significantly from 1 August 2026, and this section reflects the current position.
The Growth and Skills Levy
The apprenticeship levy, introduced in April 2017, became the Growth and Skills Levy from April 2026. It keeps the same mechanics but adds flexibility in how funds can be spent. Any employer with an annual pay bill over £3 million pays 0.5% of that pay bill into a digital apprenticeship service account, minus a £15,000 allowance. Those funds are ring-fenced for apprenticeship training and assessment with an approved provider. See the government’s guidance on paying the apprenticeship levy.
If you pay the levy, you already hold funds earmarked for training like the Level 4 AI & Automation Practitioner apprenticeship. Spending them on a course is not a new cost; it is using money already paid in. Since 2026, unused funds expire after 12 months rather than 24, so there is a real incentive to commit them.
Who pays what
The cost is shared between your apprenticeship funds and government funding. In every scenario below, the learner pays nothing; the figures are the employer’s position.
| Your situation | How training is paid for (2026) | Your contribution |
|---|---|---|
| Levy-paying, funds available | Paid in full from your levy account | Covered by your levy |
| Levy-paying, funds exhausted | Government pays 75%, you co-invest 25% | 25% |
| Non-levy, apprentice under 25 | 100% government funded | Nothing |
| Non-levy, apprentice 25 or over | Government pays 75%, you co-invest 25% | 25% |
| Using a received levy transfer | Another employer’s transferred funds cover it | Nothing |
Full detail is in the government’s co-investment guidance.
Co-investment and support for smaller employers
Co-investment is where you share the training cost with government. From 1 August 2026 the rate changed: where it applies, you pay 25% and the government pays 75%. This covers levy payers who have used up their funds, and non-levy employers taking on apprentices aged 25 or over.
There is an important exception in favour of smaller employers: non-levy businesses taking on an apprentice aged under 25 now have 100% of the training cost funded, confirmed in the 2025 Budget announcement. So a small business can train a younger member of staff at no training cost, and an older employee at 25% of the cost.
Levy transfer
Large levy-paying employers can transfer up to 50% of their unused annual levy funds to another business to pay for that business’s apprenticeships. For an SME, a larger organisation’s spare funds can cover the full cost. It is an underused route, and an advisor can help match you to available funds. See the government’s levy transfer guidance.
What changed in 2026
The reforms are the biggest change to apprenticeship funding in a decade. From the 2026 to 2027 funding year:
- Co-investment rose from 5% to 25% where it applies (government pays 75%).
- 100% funding for under-25s at non-levy SMEs, removing the old 5% employer share for that group.
- The 10% government top-up was removed.
- Levy funds now expire after 12 months, down from 24.
- Level 7 (master’s level) funding was withdrawn for older apprentices.
Detail sits in the apprenticeship funding rules 2026 to 2027.
Train your team
Our employer guide covers how to use your levy, what the 2026 co-investment changes mean for your business, and how to get a member of staff started on the Level 4 apprenticeship.
Read the employer guideHow to get started, step by step
- Check eligibility
Employed in England, with employer support, meeting the standard apprenticeship rules. An advisor confirms this on a quick call.
- Confirm the funding route
We work out whether it’s funded through the levy, co-investment or a transfer, based on the employer’s situation.
- Employer signs off
A short administrative step through the government’s apprenticeship service. We guide both sides through it.
- Start, fully funded
Training cost covered, salary intact, learning time agreed.
Funding FAQs
As an individual, will I have to pay anything?
No tuition fees, and nothing towards the levy or co-investment; those are employer and government mechanics, not costs that fall to you. You keep your normal salary throughout. The only requirement on your side is your employer’s agreement to support the apprenticeship.
Do individuals pay the apprenticeship levy?
No. The levy is paid only by employers with an annual pay bill over £3 million. As an individual learner it has nothing to do with you, you neither pay it nor need to understand it to do an apprenticeship.
(Employers) What if we don’t pay the levy?
You can still take on a funded apprentice. If they are under 25 and you are a non-levy SME, the government funds 100% of the training cost. If they are 25 or over, the government funds 75% and you co-invest 25%. The learner pays nothing in either case.
(Employers) What changed with funding in 2026?
From August 2026 the employer co-investment rate rose from 5% to 25% where it applies, the 10% government top-up ended, and levy funds now expire after 12 months. Non-levy SMEs gained 100% funding for under-25 apprentices. Level 4 programmes like this one are unaffected by the separate Level 7 funding withdrawal.
Do I need my employer’s permission?
Yes. Apprenticeship funding is arranged through the employer’s apprenticeship service account, so you need their agreement and dedicated learning time in your working week. If your employer isn’t on board yet, an advisor can help you make the case.
Official sources
Start here
See if you qualify for funded training
Apply for the Level 4 AI & Automation Practitioner apprenticeship and an advisor will confirm your funding and eligibility on a quick, no-obligation call.
Apply nowFunding figures reflect the apprenticeship funding rules for the 2026 to 2027 year and were last checked against gov.uk in July 2026. Apprenticeship funding policy changes periodically, so always confirm the current position for your circumstances using the official sources linked above.