Onefile responds to Budget changes for levy and non-levy paying employers

Onefile welcomes the news in the UK Budget announcement that smaller, non-levy paying businesses will get free training and assessment for apprentices aged under 25. 

Under changes unveiled by Chancellor Rachel Reeves, the 5% co-investment payments made by SMEs taking on apprentices in this age bracket will be scrapped. SMEs with apprentices under 22 saw these payments removed last year by the former government. This announcement, made as part of a £725 million skills investment, widens the net for those smaller employers looking to extend apprentice training to slightly older learners. 

Onefile Executive Vice-President Davinder Aujla said: “As the team behind the leading learner management platform, Onefile applauds measures that improve access to skills training, especially among SMEs who make up around 99% of UK businesses. SMEs employ around 16.6 million people and account for 60% of total private sector employment in Britain.” 

“Some employers and training providers told us they found the co-investment system rather admin-heavy, so that’s another reason they’ll be pleased to see it taken away.” 

Changes for levy-paying employers  

There were notable changes, too, in the budget for those larger employers who pay the apprenticeship levy. Under the chancellor’s reforms, the expiry period for unused levy funds will be cut from 24 months to 12 months.  

That means levy-paying employers must make sure they review their digital accounts, so they don’t lose valuable funding. Also, the government has announced it is ending its 10% top up to levy accounts. And once levy funds have been used up, employers will now have to foot 25% of the training bill, instead of the current 5%.  

Apprentices pay rates  

There are imminent changes to apprentices pay rates, too, with the apprentice minimum wage rising by 6% to £8 an hour as from April 2026.  

Apprentices will qualify for the apprentice hourly rate if they’re either aged under 19 or aged 19 or over and in the first year of their apprenticeship. That means an apprentice who is 21 and in the first year of their apprenticeship is entitled to the minimum apprentice hourly rate, which is currently £7.55 and set to increase to £8 in April.  

Those apprentices who are aged 19 or over and who have completed the first year of their apprenticeship will qualify for the national minimum wage for their age bracket. So, an apprentice aged 21 who has completed the first year of their apprenticeship is entitled to the minimum hourly rate, for employees aged 21 and over. This rate, currently £12.21, will rise to £12.71 as of April 2026. 

And apprentices aged over 19 and 20 who have completed the first year of their apprenticeship will receive the national minimum wage for employees aged 18-20 years. That is set at £10 an hour at the moment and will go up to £10.85 an hour from April. 

New shorter courses 

Employers and training providers will also need to prepare for the introduction of shorter courses. These include apprenticeship units – training modules designed to upskill apprentices in areas such as digital, advanced AI and engineering. Funded through the Growth and Skills Levy, it is envisaged that these modules will help employers respond more rapidly to targeted areas of critical skills need. 

The DfE has said it will publish more information in due course, so Onefile looks forward to seeing how these shorter programmes will support and/or complement current apprenticeship standards.  

As with most budgets, there are changes that will go down well with employers and trainers, and others that will be greeted less favourably or with a note of caution.  

Davinder added: “Onefile will support its customers in whatever way we can, helping them navigate the changing skills funding and delivery landscape, as we all learn more about the reforms.”