Earned settlement: changes to UK ILR
Home Secretary Shabana Mahmood has announced the government’s final policy framework for earned settlement, under which the standard qualifying period for indefinite leave to remain would increase from five to ten years.
Shorter pathways will recognise specified contributions and circumstances, while strengthened minimum requirements will govern eligibility.
The main changes announced are:
- Three-year settlement: available to qualifying applicants earning at least £125,141 in three of the four years immediately before applying and specified highest-talent applicants.
- Five-year settlement: available to qualifying applicants earning at least £50,271 in three of the five years immediately before applying, eligible health and education workers and people with recognised British connections.
- Ten-year settlement: the standard pathway. The proposed fifteen-year period for workers in occupations below degree level has been dropped.
- Care-worker protection: workers who entered or switched into the route before the May 2025 White Paper can retain five-year eligibility, subject to the applicable salary requirement (£25,000 a year), sponsorship, employment and strengthened settlement requirements.
- Family provisions: eligible couples can combine earnings towards a £25,142 household contribution threshold. Partners arriving together can settle together, subject to the relevant requirements.
- Longer pathways for immigration breaches: specified breaches committed as an adult will lead to a twenty-year pathway.2
For the standard ten-year pathway, the response specifies earnings of at least £12,571 in five of the seven years immediately before applying, subject to exemptions. It also announces restrictions on access to shorter settlement pathways where applicants have received specified public funds during the preceding five years, with safeguards and detailed rules still to follow.
The government has announced that care workers covered by the pre-May 2025 White Paper transitional arrangements who cannot settle after five years will be able to apply for a further five-year Health and Care visa. This permission will be restricted to genuine work in the sector, with no recourse to public funds.
A separate transitional arrangement will preserve five-year settlement eligibility for qualifying healthcare and education workers in occupations below RQF6 covered by national pay scales, who arrived before the White Paper and meet their visa requirements.
The government has also announced stronger requirements concerning criminal records, English language, government debt and sustained contribution. The earned settlement reforms will not remove ILR from people who already hold it. Protection for people already progressing towards settlement is targeted, rather than a general exemption for everyone currently in the UK.
The new qualifying periods are not yet in force, pending updated Immigration Rules and further technical guidance.1
The next stage is for formal changes to be made to the Immigration Rules to establish precisely when and how the new requirements apply to individual applications.
Current UK settlement rules
Settlement changes the basis on which the person lives and works in the UK. Once granted ILR, for example, a former Skilled Worker no longer needs employer sponsorship and can change jobs without a sponsored work application. ILR also removes the time limit on their stay and permits access to public funds where the relevant benefit conditions are met. British citizenship remains a separate application with its own requirements.
Under the current Immigration Rules, Skilled Workers, including those on the Health and Care Worker route, can normally apply for indefinite leave to remain after five years of qualifying continuous residence. Residence is only one eligibility requirement. Five years in the UK does not, on its own, establish entitlement to settlement. Applicants still have to meet the requirements governing their residence, immigration history, employment and salary, as well as the applicable suitability and Life in the UK requirements.3
The Immigration Rules already specify that Skilled Worker settlement applications made on or after 26 March 2027 must meet an English language requirement of at least B2 in speaking and listening, unless an exemption applies.
The employer also has a role at the settlement stage. Under Appendix Skilled Worker, the sponsor in the applicant’s most recent permission must remain approved to sponsor Skilled Workers on the date of decision. The sponsor must confirm that the worker is required for the foreseeable future and is being paid, and will continue to be paid, at least the applicable settlement salary. A worker who reaches five years but cannot meet the remaining conditions may therefore need further permission to stay rather than being able to settle.
Family members have to qualify in their own right under the relevant dependant provisions. A dependent partner normally needs five continuous years in the UK with permission as the worker’s dependent partner, alongside the other applicable requirements. Children are subject to separate conditions. The main applicant obtaining settlement does not automatically confer ILR on the rest of the family.
Why are the ILR rules changing?
The government has set out concerns about the number of people expected to become eligible for settlement following higher immigration in previous years. In its November 2025 consultation, the Home Office forecast around 1.6 million settlement grants between 2026 and 2030, with increased arrivals on the Health and Care Worker route contributing to that projection. These were forecasts under the existing system, rather than confirmed future applications or grants.
Public finances form another part of the government’s rationale. Home Office analysis estimated a £9.5 billion net lifetime fiscal cost for the cohort of care workers and adult dependants expected to settle between 2026 and 2030. The estimate applies assumptions about lifetime taxes and public expenditure to a forecast population. It does not calculate the savings that would result from extending the settlement qualifying period, so it should not be read as a £9.5 billion saving available through these reforms.4
Through the earned settlement model, the government is seeking to make eligibility depend more heavily on sustained economic contribution, integration and conduct.
DMS Perspective
Employers with workers facing a longer settlement pathway will now be concerned about how long they will need to sponsor those existing workers and what that commitment will cost. A longer qualifying period is likely to mean repeated visa applications and further sponsorship expenditure to retain employees already established in their jobs. The transitional protection and accelerated pathways are also going to create different timetables across the same workforce, so budgets and commitments to employees will need to reflect individual circumstances.
The cost to workers and their families will also be important in those retention decisions; the current standard ILR fee is £3,226 per applicant, or £12,904 for four applicants, before optional services or advice. A longer qualifying period could add further visa fees and health surcharges before settlement becomes available, making continued employment harder to sustain where the household cannot afford the applications required.6
Employers assessing that exposure should also review whether their records support the employee’s anticipated application. Payroll, sponsored salary, hours and reported employment changes should provide a consistent account, while workers should retain their own residence and earnings evidence, including records from previous employers. Existing Home Office guidance already permits scrutiny of salary evidence and further enquiries where it does not support the sponsor’s statements. Settlement consideration could therefore expose historical sponsorship failures, making an early sponsorship compliance review worthwhile.5
For qualifying existing care workers, the retained five-year pathway gives employers a clearer basis for planning. Settlement will give those workers greater freedom to change employment, so providers should use the period before eligibility to strengthen pay, working conditions and progression. Support with settlement can build loyalty, but employers should plan retention around the employment offer they can sustain.
Accelerated pathways may similarly strengthen an employer’s offer to international talent, provided discussions reflect the sustained earnings requirements. Meeting a sponsorship salary threshold will not necessarily secure faster settlement. With detailed Rules and evidence requirements still to follow, employers should identify likely costs and eligibility issues now, then confirm individual plans against the implementing provisions.
Practical implications for employers
Although the new settlement framework is not yet in force, and individual eligibility and application dates will depend on the implementing Immigration Rules and transitional provisions, employers can begin planning against the announcement. A longer settlement pathway could extend the cost and administration of sponsoring existing employees, and this will need mapping out to determine the impact on workforce planning, across retention, timelines and funding commitments.
1. Reassess each employee’s settlement timetable
Employees doing the same work may have different settlement dates because of their route history, earnings or transitional protection. Record each worker’s occupation, relevant entry or switching dates, current permission and anticipated pathway. Prioritise those approaching settlement or visa expiry, then check the assessment against the implementing Rules.
The announced closure of Long Residence also affects planning for employees relying on earlier Student, Graduate or other temporary permission. Identify those assumptions now and reassess dates once the Rules establish which periods will count.2 Include dependants in that review. Under the announced framework, young adults aged 18–24 retaining child-dependant status can settle with their family without an individual earnings requirement, subject to adult mandatory requirements. Those aged 25 or over when their family becomes eligible will generally need to qualify independently or move onto another appropriate route.2
2. Budget for further sponsorship and agree who pays
Calculate the additional cost for the actual workforce, including further Certificates of Sponsorship, the Immigration Skills Charge where applicable, administration and professional support. Visa fees and any applicable Immigration Health Surcharge also affect affordability. Health and Care Worker applicants currently benefit from a surcharge exemption.
An employee may want to stay but be unable to fund repeated applications for their household. Review contracts, offer letters and immigration policies to establish what support has been promised. An undertaking to fund the initial visa may differ from a commitment to support the employee through to settlement.
Document any further support, including its treatment of extensions, dependants and settlement. Distinguish charges employers must bear from costs they may choose to fund. Repayment clauses and payroll deductions require scrutiny under sponsorship rules and employment law.
3. Assess earnings history before discussing faster settlement
Meeting the salary requirement for sponsorship will not necessarily secure an accelerated settlement pathway. The announced earnings tests require a sustained history, so a pay rise shortly before an application may leave the employee short of the qualifying years.
Review previous earnings alongside future pay progression before discussing likely eligibility. Any salary commitments should also be assessed for affordability, internal consistency, equal pay and discrimination risk.
For the pre-April 2024 Skilled Worker cohort in below-RQF6 roles facing ten-year settlement, the government has announced that transitional visa-extension arrangements will continue until 2035. Identify employees who may fall within that cohort before budgeting for extensions.2
4. Check records and sponsorship compliance together
Payroll, contracts, sponsored hours and reported employment changes should give a consistent account of the employee’s work. Investigate discrepancies early, including unexplained salary reductions or changes that were never reported. Legitimate periods of reduced earnings should have supporting evidence.
Existing Home Office guidance permits scrutiny of salary records and further enquiries where the evidence does not support the sponsor’s statements. A settlement application could therefore expose historical sponsorship failures, although it does not automatically trigger a compliance visit. Care providers should pay particular attention to actual pay, hours, duties and work locations.
Workers should retain their own residence and earnings records, including evidence from previous employers. Employers’ retention arrangements should reflect legal duties, a justified business need and the evidence requirements once published.
5. Review the employment offer before settlement approaches
Qualifying existing care workers retaining five-year eligibility may leave sponsorship sooner than colleagues on longer pathways. Providers should identify where several workers could become eligible together and assess staffing exposure.
Settlement gives workers greater freedom to change employment. Pay, working conditions, management and progression will therefore matter to retention. Support with settlement can strengthen the relationship, but cannot guarantee continued service.
Recruitment teams should also review how they describe settlement prospects. Explain the support the employer will provide and the requirements the applicant must meet. Avoid promises of settlement after a fixed period. Family costs, a partner’s career and children’s immigration position may all influence whether an employee accepts an offer or remains in the UK.
6. Plan for disruption before permission expires
A longer sponsorship period increases exposure to acquisitions, changes of employing entity, redundancies and sponsor licence action. Restructuring plans should address the receiving employer’s ability to sponsor, reporting duties and any applications needed to preserve lawful employment.
Settlement delays or refusal also require individual assessment. Completing the qualifying period does not ensure approval or an automatic extension. Where a valid, in-time application engages section 3C, existing permission and conditions can continue while it is pending and during qualifying challenge periods. Verify the continuing right to work through the prescribed process.7
Assign responsibility for the review across HR, payroll and finance. The immediate output should identify employees needing further sponsorship, the funding required and roles exposed if permission or continued employment becomes uncertain.
Need Assistance?
For advice on any aspect of the new earned settlement rules, either as an employer concerned about the impact on workforce planning or as an applicant planning for settlement, book a fixed fee telephone consultation to speak with one of our expert UK immigration advisers.
Sources
