Post-16 National Insurance contributions (NICs) grant

July 2026 update 

We are announcing an investment of around £120 million for colleges and other further education providers in financial year 2026 to 2027, rising to around £365 million in financial year 2027 to 2028. This funding will address immediate recruitment and retention needs, boosting opportunity for learners and driving skills for growth.

Part of this investment will be delivered by increasing component 2 and component 3 of the Post-16 National Insurance contributions (NICs) grant. We aim to make updated payments from OctoberSeptember 2026. These are the elements of the post-16 NICs grant which support:

• colleges with their non 16 to 19 education delivery
• local authorities with adult centrally employed teachers

Overall, this investment will drive forward high-quality delivery for 16 to 19 funded students and help support public sector providers with a wider range of post-16 provision.

To reflect the wider coverage of the NICs grant, this will be renamed the post-16 budget support grant (P16BSG).) from April 2027.

We willhave updated the methodology and conditions of grant to provide further details of this increased investmentinvestment. shortly.Updated allocations will be provided by September.

Who should read this guidance

This guidance is for: 

• maintained school and academy sixth forms 
• 16 to 19 academies 
• 16 to 19 schools   
• sixth-form colleges  
• general further education colleges  
• designated institutions – including the new designated institutions that form part of higher education provider group structures  
• local authorities

Methodology 

This document sets out the methodology for the post-16 NICs grant. grant, including the additional investment delivered by increasing components 2 and 3 of the post-16 NICs grant. It includes guidance on how we will allocate funding for financial year 2026 to 2027 for eligible institutions.

Conditions of grant 

This outlines the terms that apply to the post-16 NICs grant, including the additional investment delivered by increasing components 2 and 3 of the post-16 NICs grant.

Allocations and payment

Payments will be received in September 2026 for:

• local authorities
• maintained school sixth forms
• 16 to 19 schools
• all colleges and designated institutions

Academy sixth forms and 16 to 19 academies will receive payment in October 2026.