Who Trains The Next Generation? What The Level 7 Funding Change Means For Practice

Who Trains The Next Generation? What The Level 7 Funding Change Means For Practice

Posted 18 August 2026 by Lydia Sinclair FREC

Every recruitment market has a problem it can see and a problem it cannot. The one practice can see is that qualified people are hard to find. The one it cannot see yet arrived on 1 January 2026, and it will not show up in anybody's numbers until about 2032.

This is a piece about training, funding, and the quiet decisions firms are making right now that will decide who is available to hire in a decade.

What changed on 1 January 2026

The government restricted funding for Level 7 apprenticeships to people aged 16 to 21 at the start of their apprenticeship, or under 25 for care leavers and those with an Education, Health and Care plan. It was announced in May 2025 and took effect at the start of this year.

Level 7 is the Accountancy or Taxation Professional standard, which covers the chartered qualifications. ACA, ACCA, CIMA and CTA all sit here.

Anyone who began before 1 January 2026 continues to be funded through to completion, so existing trainees are unaffected. For everyone else aged 22 or over, the funding has gone. Self funding runs to somewhere in the region of twenty one thousand pounds per person.

ICAEW, ACCA and CIPFA all lobbied against it. ICAEW's specific warning was that an age based exemption would skew recruitment towards school leavers, and they asked the government to review whether the change had achieved anything after a year. That review point is roughly now.

Level 4 is a different story, and that distinction matters

The AAT Level 4 Professional Accounting Technician apprenticeship is still funded, with no age restriction. Levy paying employers draw from their pot. Employers with a payroll under three million contribute five per cent of the cost for apprentices aged 22 and over, and nothing at all for those aged 16 to 21.

So the technician route remains open to career changers, returners and anyone coming into practice later. It is the chartered step that has narrowed.

The cliff edge nobody has diarised

Here is the part that catches firms out.

Somebody completes their Level 4 at 21. They are excellent. You want to put them through ACA. But by the time they finish their end point assessment and start Level 7, they have had a birthday, and the funding is gone.

ICAEW is now telling firms to review timelines and, where possible, bring end point assessments forward so people can start Level 7 before turning 22. That is a diary exercise, not a strategy, and it is the single most actionable thing in this article. If you have Level 4 trainees who are 20 or 21, work out today when each of them turns 22 and plan backwards from it.

What firms are asking me, and where the line sits

Since January I have been asked how old a candidate is more times than in the previous sixteen years combined. The motivation is never prejudice. It is a partner with a training budget doing arithmetic.

But motivation is not the legal test. Age is a protected characteristic under the Equality Act 2010. Direct age discrimination can in principle be objectively justified as a proportionate means of achieving a legitimate aim, which is unusual among protected characteristics, but the bar is high and cost alone is generally not enough to clear it.

In practice that means an instruction to only see candidates under 22, or an advert that signals it, creates real exposure however sensible the reasoning felt in the room. If funding eligibility genuinely is a factor in how you structure a role, take proper employment advice on how to express it before it reaches a candidate. This is not an argument for pretending the funding change has not happened. It is an argument for handling it properly.

The related trend is briefs specifying AAT qualified candidates who are not looking to continue to ACA or ACCA. I understand why. It is still worth asking whether you are designing a role around a funding rule and inheriting the consequences later.

What the firms handling this well are actually doing

Three patterns, all of them from firms in my patch.

They have stopped defaulting to one tuition provider. Plenty of firms send every trainee on the same classroom route because that is the habit. Some candidates would genuinely rather study by distance learning in their own time, and that costs a fraction of the alternative. The qualification is identical. Asking the question costs nothing.

They build the package around the person. A lower starting salary with full study support, or a higher one with a contribution, presented as a choice rather than a policy. Candidates respond well to being trusted with that decision, and it lets a firm support more people for the same money.

They have opened up at the bottom. Sussex firms in particular are actively taking A level college leavers, which is the rational response to a funding regime that now rewards hiring younger. If the money follows the 16 to 21 bracket, build a route into that bracket.

Where the next generation actually comes from

If the funding has moved towards school leavers, the pipeline has to start earlier. That is not a hardship, it is a redesign.

The Accounting T Level is the obvious front door and almost no independent practice uses it. It is a two year technical qualification with a compulsory industry placement of at least 315 hours, roughly 45 days. Colleges have to place those students somewhere and are actively looking for employers. ACCA will count supervised placement experience towards a student's practical experience requirement later in their journey.

For 45 days you get a sixteen to eighteen year old in your accounts room finding out whether they like the work, while you find out whether you like them. No fee, no obligation, and first refusal if they are good. Then Level 3 or Level 4, fully funded at that age, and Level 7 started before their 22nd birthday.

That is a complete, funded route from school to chartered. It just has to be planned rather than stumbled into.

We have done this before, twice

In 2009 and 2010, study contracts quietly dried up. Firms were protecting cash in a recession and training was the easiest line to pause. It happened again in 2020 for the same reason.

Both times the profession lost most of an intake. Both times it took around six years for anyone to notice, at which point the gap showed up as an inability to recruit managers.

That is not hindsight. It is the reason a good audit manager is currently one of the hardest hires in the South East, and it is why so many firms have a strong senior layer, a strong partner layer, and very little in between.

The funding change is different in cause but identical in effect. If firms respond by training nobody rather than by training differently, the shortage of 2032 is being created right now.

Final thought

The decision in front of most practices is not whether to spend twenty one thousand pounds on a chartered apprenticeship for a 24 year old. For a lot of firms that genuinely is not affordable, and saying otherwise would be glib.

The decision is whether to build a route that works under the rules as they now are. Earlier intake, a funded technician stage, chartered study started before the age limit bites, and a package designed around the individual rather than a policy written in 2019.

Firms that do that will have a manager bench in ten years. Firms that quietly stop training will be competing with everyone else for the same shrinking pool, and paying for the privilege.

If you are rethinking how you bring people into your practice and want to talk it through, or you are trying to fill a role that a job advert is not going to solve, I am always happy to have that conversation.