Is your levy being used effectively?
Research suggests that only around 4% of levy-paying employers fully spend their allocation. Typical utilisation sits somewhere between 40% and 55% (Source: 100% Effective, UK Apprenticeship Levy Guide, 2025).
That means for most organisations, roughly half of what they’re paying in is coming back out. Not as training. Not as skills development. Just as a lost opportunity.
Why utilisation is so low
There are several reasons levy funds go unused, and most of them aren’t about a lack of training needs.
The system can feel complex to navigate. The Digital Apprenticeship Service has improved over the years, but it still requires active management. HR and L&D teams are often balancing a wide range of competing priorities, and without a dedicated resource, identifying suitable programmes, matching them to employees, and handling the administration can be difficult to sustain. There’s sometimes a perception that apprenticeships are only relevant for new hires or young people, which simply isn’t true, given the range of programmes now available.
And frankly, many organisations just don’t prioritise it. The levy comes out automatically. There’s no invoice to approve, no purchase order to sign. It’s easy for it to become invisible in the day-to-day running of the business.
None of these reasons hold up to scrutiny once you look at the numbers, but they persist because the levy doesn’t demand attention in the same way other financial obligations do.
What expiring funds actually cost
Let’s make this concrete with some realistic scenarios.
If your organisation has a £10 million annual pay bill, you’re contributing roughly £35,000 per year into the levy (after the £15,000 allowance). Over the 24-month window before funds expire, that’s £70,000 available for training (this window decreased to 12 months for any new levy contributions from April 2026, reducing your window of opportunity to utilise your funds). If you’re only using 50% of your allocation, you’re losing £35,000 every two years. Money you’ve already paid. Money that could have been spent on developing your people.
For larger organisations, the figures scale rapidly. A company with a £50 million pay bill contributes around £235,000 annually. At 50% utilisation, that’s over £230,000 wasted every two years. At the industry average of 40-55%, the losses run into hundreds of thousands.
These aren’t hypothetical numbers. According to IPPR research, employers have returned over £3.3 billion to the Treasury since May 2019, averaging £95 million per month (Source: London Progression Collaboration, IPPR, July 2022).
The visibility gap
Part of the challenge is that levy spending doesn’t appear in most standard financial reports. It’s deducted automatically through PAYE, lumped in with other employment costs. What happens after that, whether the funds are used or expire, often sits outside normal financial oversight.
Unless someone specifically asks about utilisation rates, fund balances, and upcoming expiry dates, it’s entirely possible for significant sums to disappear without anyone at a senior level being aware.
The reality is that levy oversight often sits across finance and HR, and it’s worth both functions having visibility of the same data. Finance leaders who assume the levy is being handled effectively may find it useful to start a shared conversation about utilisation rates and upcoming expiry dates.
Signs your organisation might have a problem
There are a few indicators suggesting your levy utilisation warrants attention. If no one can quickly tell you how much is in your DAS account, that’s a warning sign. If your organisation hasn’t started any new apprenticeships in the last 12 months, that’s another. If the only apprenticeships you run are entry-level programmes for new hires, you’re probably not using the full range of options available.
The clearest indicator is simply the numbers. If your monthly levy payments significantly exceed your monthly training spend through the system, funds are building up. And if they’re building up, they’re eventually expiring.
What to do about it
The first step is straightforward. You need to know your current levy balance via the Digital Apprenticeship Service, your monthly inflows, what’s been spent in the last 12 months, and crucially, what’s due to expire in the coming months.
Once you have that information, you can have a proper conversation about whether your organisation is making use of available resources. Are there skills gaps in your organisation that could be addressed through apprenticeship programmes? Are there employees who would benefit from professional development that the levy could fund?
If you find that you genuinely can’t use your full allocation, there are still options. Employers can transfer up to 50% of their annual levy funds to other organisations, including SMEs in their supply chain. That’s better than letting it go to waste.
Taking the next step
We’re not suggesting your organisation definitely has a problem. But if no one’s checked recently, it’s worth asking the question. The numbers are often surprising, and the sooner you identify a gap, the more time you have to address it.
We can help you make sense of your levy position and identify the opportunities.
Aarrange a call about your organisation’s options