UK earned settlement overhaul could drive up costs for employers

Shara Pledger, immigration law expert at Pinsent Masons, was commenting after changes to how migrants qualify for settlement in the UK were announced by home secretary Shabana Mahmood earlier this week.

The changes follow plans trailed in November 2025 when the government confirmed it would increase eligibility thresholds for permanent residence in the UK, doubling the qualifying time a person must have lived in the UK to earn permanent status, or “indefinite leave to remain”, from five years to 10 years.

Previously, many migrants were able to settle in the UK after five years provided they met certain strict criteria, including passing language tests and possessing no criminal convictions. However, the new rules will extend the standard qualifying period to 10 years, with faster and slower paths available depending on four key principles: character, contribution, integration and residence.

In general terms, the new rules establish higher residence periods, salary thresholds and good character tests, making it harder for overseas workers to qualify for settlement. The government said the new earned settlement model would create a migration system that is “fair to those who come here and play their part, and fair to British citizens already here, who must not be asked to bear a greater burden”.

In the recent Budget, the government confirmed that sponsorship salary thresholds for some roles will be reviewed, potentially reducing salaries needed for sponsorship of specific workers. Although they will not go below the general sponsorship threshold – currently £41,700 for many overseas workers – and the government has confirmed this threshold will increase in line with 2026 wage averages.

While this may assist some employers with sponsorship of workers in key roles, Pledger said the changes to earned settlement status will end up costing many businesses considerably more in the long run, particularly those with lower paid workers. "For many employers sponsoring overseas workers, these changes may require them to sponsor and support workers for longer, increasing their costs in the process,” she said.

The fastest settlement routes are available for highest earners – those earning more than £125,141 – who can qualify in three years, and higher earners – those earning more than £50,271 – who can qualify for permanent settlement in five years.  

Workers in specified health and education occupations, including doctors, nurses and teachers, can also qualify for settled status in five years, as can applicants in specific immigration routes, such as Hong Kong British National Overseas and applicants whose status relies on a relationship with a UK national.

The government previously suggested it would make overseas care workers already in the UK wait 15 years to qualify for permanent settlement, but this proposal received considerable public backlash. In recognition of the contribution made by many of these workers to the UK’s social care sector during the Covid-19 pandemic, the government has now confirmed that care workers who have worked in the UK care sector since before May 2025, meet their visa conditions and earn at least £25,000 a year will also be permitted to settle after five years.

The government said some care workers who do not qualify automatically for five-year settlement – around a quarter of the total – will also be offered a “second chance” to contribute by restarting a five-year settlement route restricted to work in the adult social care sector. The targeted, one-off transitional arrangement applies solely to care workers who entered, or switched into, the route before publication of the Immigration White Paper (80 pages/2.3 MB PDF) in May 2025, and does not create a wider exemption for other overseas workers already living here. Care workers who entered the route after publication of the May 2025 white paper will default to a 10-year settlement route.

Eligible couples can combine earnings to meet the financial contribution requirement. This means that one partner can potentially work fewer hours due to caring responsibilities and the couple will still qualify, provided that they meet the combined threshold together.

Dependent family members can generally settle together. A partner who arrives with the principal applicant will continue to settle at the same time; a partner who joins later must complete the same qualifying residence duration as is applicable to the main applicant.

The rules for minors remain broadly the same. Children aged under 18 can settle with their parents. Young adults aged 18 to 24 retaining child-dependant status can settle alongside family members without needing to meet the individual earnings requirement. Those aged 25 or over when their family becomes eligible must qualify independently or move onto an appropriate immigration route in their own right.

Although the government has opted to retain the existing two-year graduate visa for certain universities, time spent as a student or graduate is still regarded as a ‘temporary route’ and will not count towards the overall 10-year standard qualifying period for permanent settlement following planned removal of the ‘long residence’ route.

The government said those who have committed specified immigration breaches will have a 20-year pathway, regardless of their earnings or positive contributions.

The commencement date for these changes has not yet been confirmed. The government said it will publish further guidance setting out technical and operational details in due course.