Increased sponsorship costs for UK firms under ‘earned settlement’ route

The Home Office has opened a consultation on major changes to the UK’s settlement rules that will increase the standard qualifying residence period for Indefinite Leave to Remain from 5 years to 10 years. It’s a fundamental change and for employers it means more visa applications, higher costs, and a much longer period of compliance responsibility. So, looking ahead, how should employers plan, budget and manage sponsorship? We’ll ask an immigration expert that question. 

The consultation sets out a new “earned settlement” model, where the time it takes to reach settlement depends heavily on salary and the type of role. Higher earners may still reach settlement in five years, but those on lower salaries could face a ten-year route instead. It’s a big move, and for employers it brings a long list of implications.

Longer routes mean more immigration events. Many sponsors don’t issue five-year visas currently – they often sponsor in shorter blocks of two or three years. Under a ten-year pathway, that becomes multiple renewals, each carrying fees. On top of that, sponsors are responsible for meeting their compliance duties for as long as an individual is sponsored, so a longer timeline means more monitoring, more reporting, and more opportunity for errors that could affect a sponsor licence.

There’s also a wider impact on how businesses attract and retain talent. A ten-year route will feel very different for workers deciding whether to relocate, and it may hit certain sectors and regions harder, particularly where salaries fall below the thresholds needed to qualify for a shorter settlement period. That makes workforce planning and clear communication with sponsored staff increasingly important.

So let’s get a view on this. Shara Pledger heads up the Immigration Team here at Pinsent Masons and earlier she joined me by video-link from Manchester to discuss it: 

Shara Pledger: “This is a major change to the immigration rules. We haven't seen this approach of having such a lengthy period of time to get to settlement, certainly under the Points Based System, so we're talking well over a decade, really. What it will mean for individuals, of course, depends on where they fit within those criteria. So for some individuals, they might not see too much of a change, but for others, they might actually feel very, very different once these changes come into force.”

Joe Glavina: “What would doubling the qualifying period mean in practice for employers in terms of sponsorship costs, and attracting and retaining talent?”

Shara Pledger: “It’s a double-edged sword for sponsors, unfortunately. They obviously have significant costs that come along with sponsorship that they'll be paying each and every time they issue sponsorship to a person. Now, at the moment you can sponsor somebody in one go for up to five years. If that person's settlement period is going to extend from five years up to ten, we're obviously looking at more applications than they would ordinarily see and that's certainly the case for the vast majority of sponsored workers who are often not sponsored for a five-year chunk to begin with. They might be sponsored for three years or for two - today, probably having a traditional three years plus a two-year extension and then settlement - but we could see that extending to three years and three years to four years, for example. So lots of extra applications which means lots of extra cost, which means lots of extra resources for the sponsors as well because, obviously, all of this stuff needs to be managed, but also lots of extra sponsor duties. Sponsor compliance has been a really, really hot topic for 2025 that's going to continue through to 2026. The longer that somebody is sponsored for, the longer the period of time that a sponsor has those very long list of duties to comply with, the greater the chance that there might be a slip up or something along those lines that could result in a problem with their licence.”

Joe Glavina: “Which sectors do you think will be most affected?

Shara Pledger: “The changes are sector agnostic in the sense that they will apply to everybody equally, but because we do have criteria that are based on salary - so the higher the salary that you earn, hopefully, the shorter a qualification period that you'll have to settlement - it does mean that that sectors that are perhaps at the slightly lower end of the market average in relation to salaries are probably going to be more widely affected. I think what's really interesting, as well, is that it might not necessarily be a sector issue, but actually more a geographical issue. When you've got a requirement of earning just over £50,000 a year to be able to fit within a five-year settlement bracket, that's a lot easier to achieve if you work in central London than it is to achieve if you work in the North East of England, for example. So there will be a real disparity based on where somebody works as to whether or not they're able to meet the criteria to qualify for a shorter settlement time.”

Joe Glavina: “This is still some time away – we’re in the consultation period now of course Shara – so what should HR teams be doing now, without getting too far ahead of policy?”

Shara Pledger: “HR teams can certainly look to feed into the consultation. It's open for quite a long time, it won't be closing until 12 February 2026, so there's a good opportunity to go through it in detail, consider which bits you might like to answer, which bits you don't feel are really that relevant to you, and actually get that information in and before the Home Office so they can actually look to make informed decisions about how this policy might take effect. I think what's also quite helpful is that it sort of puts things into a slightly surer footing for individuals. Since May of 2025 when we had that white paper on what the future of the immigration system might look like in the UK, sponsored workers have felt very unsettled. They've known that something has been coming in relation to settlement, they haven't really known what it is, and this is a good opportunity to be able to actually pass on some of that information, to talk about, for example, that consultation closure date because it means that certainly we're not going to see any changes to the rules before 12 February 2026 for example, but we know that changes might be coming after that date. So there's actually quite a lot that organisations can do with the information that's contained within this consultation document. If it's an organisation that uses sponsorship quite sparingly, and only for its most senior or most technically skilled members of staff, they may well be more likely to fit within those brackets of salary that will qualify for a shorter qualification time and, again, that can be communicated on to workers to put them at ease. So hopefully, it isn't just an opportunity for sponsors to feed back into that system and to perhaps help to shape what comes out the other end, but it's also an opportunity for organisations to get a bit more data that has been lacking up to this point.”

The consultation is called ‘Earned settlement’ and runs until 12 February 2026. If you would like to submit your views you can do that online via the government’s website. We’ve provided a link to it in the transcript of this programme for you.

- Link to government consultation on ‘Earned settlement’