UK firms ‘face rise in costs’ to support workers under immigration revamp

Home secretary Shabana Mahmood has launched a consultation on major changes to settlement requirements for people coming to the UK, including indefinite leave to remain and those sponsored under skilled worker status.

Those looking to come to the UK could face a wait of up to 10 years to earn settled status, although that period could be shortened for individuals who ‘make an outsized contribution to… national life’ – either through talent, tax contributions or voluntary service.

The proposals would also mean everyone with a currently temporary immigration status, regardless of how close they are to settlement, would be impacted.

Shara Pledger, an immigration expert with Pinsent Masons, said the proposals would have a significant impact on companies which are sponsoring international staff members’ visas and right to work.

“These changes for business immigration routes will make the scheme overall significantly less attractive to some applicants, which will reduce the pool of available talent for firms here,” she said.

“It also means increased expenses for companies who do sponsor staff – as they will now need to sponsor workers for longer, making extra applications all at additional cost.

“For those already working here under the skilled worker route, it may also raise increased concerns and make them feel more unsettled.”

Under the proposals, workers sponsored on an annual salary of £50,270 or more can retain a five-year settlement period and would not see any real change to their settlement journey, unless they have negative behaviours that increase their settlement period or prevent them achieving that status, such as criminal convictions or immigration issues.

For those on salaries lower than £50,270, however, the settlement period is set to increase from five to 10 years, although this can be reduced by passing higher level English courses or carrying out volunteering work.

Dependants of workers will also not automatically benefit from any time adjustment earned by the main applicant – which would mean people on lower wages may end up with a settlement period significantly longer than their higher-earning partner.

Some shorter settlement routes – such as spouses and dependents of British citizens, or British Nationals Overseas – will be available, while the settled status agreed under the EU Settlement Scheme is not in the scope of the review.

The consultation process runs until 12 February 2026, with the proposed changes likely to not be implemented until later in the year.

Companies which would be impacted by the new legislation should take the time that affords them to review whether or not they want to contribute to the consultation process, either as an organisation or through individual staff members, said Pledger

The proposals come on the back of announced changes to immigration laws on students attending UK universities, as the Labour government tries to tighten up its immigration policies amid political and media pressure.