Apprenticeship Funding Explained: A Guide for Employers

For many firms, the topic of apprenticeship funding seems complex, filled with jargon about levies and co-investment.

The good news is that it's far simpler than it looks.

For the vast majority of businesses, including most law firms and conveyancing practices, the government will pay at least 95% of the apprenticeship training and assessment costs.

This article breaks down exactly how apprenticeships are funded, what you pay, and what you get. Your funding route depends on one simple factor: the size of your annual pay bill.

1. Funding for Non-Levy Employers (Most SMEs)

• Who this is for: Employers with an annual pay bill of less than £3 million. This applies to most small and medium-sized law firms and property practices.

This is the most common funding route, and it's called "co-investment."

The arrangement is simple:

• The government pays 95% of the agreed training and assessment cost (up to the funding band maximum).
• Your firm pays the remaining 5%.

For example, if the total cost for a conveyancing apprenticeship is set at £9,000, the government contributes £8,550. Your firm’s total contribution, for the entire multi-year programme, would be just £450.

100% Funding for Young Apprentices

Recent updates have made this even more attractive. As of April 2024, if you are a non-levy employer, the government will pay 100% of the training costs for apprentices who are aged 16-21 when they start.

This means you can hire a new, young apprentice and pay zero for their formal training and qualification.

2. Funding for Apprenticeship Levy Payers

• Who this is for: Large employers with an annual pay bill of over £3 million.

If your firm is in this category, you already pay the Apprenticeship Levy.

• How it works: You pay 0.5% of your pay bill (over the £3m threshold) into a digital "levy pot." The government also adds a 10% top-up to this.
• What it's for: This money is your training budget. You must use it to pay for apprenticeship training and assessment.
• Use It or Lose It: If you don't spend the funds in your levy pot within 24 months, they expire and are returned to the government.

For levy-paying firms, using this pot to fund a probate apprenticeship or legal apprenticeship is a "use it or lose it" scenario. It’s a strategic way to invest money you are already spending to build the exact skills your firm needs.

Other Costs & Incentives to Know About

What does the employer always pay for?

The funding above covers the cost of the training and assessment delivered by us, your training provider.

As the employer, you are responsible for paying your apprentice's salary. They are your employee, so you must pay them at least the National Minimum Wage for apprentices for all the time they are working and the 20% of their time they are in "off-the-job" training.

The £1,000 Employer Incentive

To support businesses, the government provides an additional £1,000 cash payment for all new apprentices who are:

• Aged 16-18 at the start of their apprenticeship.
• Aged 19-24 and have an Education, Health and Care (EHC) plan or are a care leaver.

This payment is made directly to you in two £500 instalments (at 90 days and 365 days) and can be used for any purpose, such as helping with salary costs or equipment.

National Insurance Contributions

As an extra benefit, employers do not have to pay Class 1 National Insurance contributions for any apprentice under the age of 25 (on earnings up to £50,270 per year).

How We Make Funding Simple

This is our expertise, so you don't have to be a funding expert. As your specialist training provider, we guide you through the entire process.

We will:

• Confirm your funding route (Levy or Non-Levy).
• Help you set up your digital "Apprenticeship Service" account to manage funds.
• Manage all the funding administration and claims.
• Ensure you access every incentive payment you are entitled to.

Your focus remains on running your practice and mentoring your new team member. We handle the rest.

Take the Next Step

Funding is designed to be an incentive, not a barrier. Now that you know how affordable it is to hire an apprentice, see the full impact it can have on your firm.

• Discover the Benefits of Hiring an Apprentice
• Learn about your Responsibilities as an Employer
• Explore our specialist programmes: Conveyancing Apprenticeships and Probate Apprenticeships

Ready to get a clear cost breakdown for your firm? Contact our team today.