Apprenticeship Funding Explained

A Complete Guide to Apprenticeship Funding for Early Years, Education & Residential Childcare

Are you responsible for workforce development in early years, education, or residential childcare? If so, you’re likely facing challenges such as recruitment costs, retention issues and budgets being tight.

The good news? There’s a government-funded solution that addresses all these challenges: strategic apprenticeship programmes.

Why apprenticeships are a game changer

Many employers avoid apprenticeships because the funding rules seem complex. Levy systems, co-investment percentages, and eligibility requirements can feel overwhelming. But by overlooking apprenticeships, you’re missing out on one of the most powerful workforce development tools available.

Modern apprenticeships span Level 2 to Level 6 (degree level) not just entry level, creating career pathways that improve recruitment, retention, and staff morale.

Orange Moon Apprenticeship Progression Pathways

Early Years Pathway

Level 2: Early Years Practitioner

Level 3: Early Years Educator

Level 5: Early Years Lead Practitioner

Education Pathway

Level 3: Teaching Assistant

Level 5: Specialist Teaching Assistant

Level 5: Flourishing Leaders in Schools (in development)

Level 6: Post Graduate Teacher

Residential Childcare Pathway

Level 4: Children, Young People & Families Practitioner

Level 5: Children, Young People & Families Manager

Understanding Apprenticeship Funding

Funding depends on your organisation’s size, but apprenticeships are designed to be affordable.

For Non-Levy Paying Employers (Payroll Under £3 Million):

From 1 August 2026, apprenticeship training and assessment costs are fully funded by the government for non-levy employers when the apprentice is aged 16 to 24 at the start of their apprenticeship.

For apprentices aged 25 and over, government continues to fund 95% of training costs and the employer contributes 5%.

Example: a £5,000 apprenticeship would typically cost an employer £250 for a learner aged 25+.

Additional incentives:

£1,000 bonus for apprentices aged 16–18, care leavers, or those with EHCPs.
100% funding if you employ fewer than 50 staff and take on a 16–18-year-old apprentice.
From 1 October 2026, eligible non-levy employers can receive a £2,000 hiring payment when recruiting a new apprentice aged 16 to 24, subject to eligibility criteria. Payments are typically made in instalments during the apprenticeship.

For Levy-Paying Employers (Payroll Over £3 Million)

Levy-paying employers contribute 0.5% of their payroll through the Growth and Skills Levy. From August 2026, levy funds expire after 12 months rather than 24 months, making workforce planning even more important.

Levy Transfer Opportunities

If budgets are tight and even the 5% fee you may need to pay towards an apprenticeship is a struggle, there is the option to look for a levy transfer. This is where you seek support from a levy-paying organisation to support your training through their unused levy.

Levy-paying organisations can transfer up to 50% of their annual levy funds to other employers, helping smaller organisations access apprenticeship funding.

Orange Moon Training helps facilitate these partnerships, unlocking funding opportunities to support professional development across a wide range of businesses and organisations.

Why Apprenticeships Work for Recruitment & Retention:

Existing staff: Gain formal qualifications, boosting morale and loyalty.

New recruits: Clear career pathways make your organisation more attractive.

Train while you work: Training integrated into daily work through activities like mentoring, shadowing, and research.

Why Choose Orange Moon Training?

Sector-specific expertise in early years, education, and residential childcare.
Full support navigating funding and levy systems.
Tailored implementation for your setting.
Compliance guidance and ongoing support.

Check out our course page or drop us a message and we can help you:

Assess your workforce needs
Identify apprenticeship pathways
Clarify funding options
Explore levy transfer opportunities

Still confused?

If you are still unsure as to how much an apprentice may or may not cost you, try our easy-to-use apprenticeship calculator for an estimate. Just click below!