Proposed changes to UK Settlement (Indefinite Leave to Remain): what migrant workers and employers need to know
The Home Office’s consultation on its proposed “Earned Settlement” model closes on 12 February 2026. If implemented, these proposals would represent the most significant changes to Indefinite Leave to Remain (ILR), aka Settlement, in decades. The main proposal is to increase the standard qualifying period of residency in the UK for Settlement from five years to ten years for most applicants; this will affect the many people who are on Skilled Worker, Spouse / Partner or PBS Dependants visas for whom the current required residency period is five years. Under the proposals, it would be possible for applicants to reduce this ten-year period by meeting certain criteria; conversely it may be increased if specific negative factors apply.
NB: The EU Settlement Scheme and Windrush Scheme are not included in this consultation and will continue to operate separately.
Baseline requirements for Settlement
All applicants would need to meet three baseline requirements:
- Suitability: no breaches of the Immigration Rules, no criminal convictions, and no outstanding NHS debt.
- Integration: meeting the English Language requirement* and passing the Life in the UK test.
- Minimum salary: – earning at least £12,570 per annum.
*the English Language requirement would also increase to Level B2 on the Common European Framework of Reference for Languages (CEFR); this is the requirement for Skilled Worker visa applicants from 8 January 2026.
Criteria which could reduce the qualifying period
The default ten-year residency requirement could be reduced by the following criteria:
- Financial Financial: earnings of at least £50,270 would reduce it by five years, whilst earnings of £125,140 or more would reduce it by seven years.
- Contribution Contribution: volunteering in the community would reduce it by between three and five years (exact definitions to be clarified after the consultation); working in a specified public sector role (e.g. teaching or medicine) would reduce it by five years.
- English Language achieving the higher Level of C1 in English under the CEFR would reduce it by one year.
Factors which could increase the qualifying period
The ten-year period could be increased if any of the following apply:
- Claiming public funds: claiming for up to 12 months would increase the qualifying period by five years, whilst claiming for more than 12 months would increase it by ten years.
- Skill level: working in a Lower-skilled role (below RQF Level 6 on the Regulated Qualifications Framework) on which new Skilled Workers were permitted to be sponsored up to 22 July 2025) would increase it by five years.
- Immigration breaches: illegal entry to the UK, entering as a Visitor and remaining unlawfully, or Overstaying would increase the qualifying period by up to 20 years.
Where an individual meets two or more of the positive criteria, it may be possible to use them in order to achieve a cumulative reduction; however, it is likely that a new baseline minimum period will be set.
Where both positive and negative factors apply, they would be offset against each other; for example, a five-year reduction combined with a ten-year increase would result in a net five-year increase.
Implications for migrants
On the face of it, the proposed Earned Settlement system is a move away from automatic eligibility after five years and towards a model which rewards economic contribution, English language ability, and financial independence. On closer inspection however, the proposals would be skewed in favour of high-earners to the detriment of lower-paid workers in sectors such as retail, hospitality, and care. Additionally, whilst volunteering and community contribution would be valued, they would be deemed to be worth less than high earnings. Remembering that PBS Dependants can work in the UK with no minimum salary requirement, whilst those on Spouse / Partner visas only need to meet a joint income requirement with their partner, the proposals may disproportionately affect female migrants who are more likely to be in lower-paid or part-time work, and / or to have taken time away from work due to child care responsibilities.
Implications for employers
For many migrant workers, higher pay would dramatically shorten their route to Settlement. Employers may therefore face requests for pay increases based on individuals’ Immigration needs, rather than their actual performance. This could include PBS Dependant visa holders and those on Spouse / Partner visas, as well as Skilled Workers. Increasing salaries on this basis will obviously lead to higher wage bills, but would also have a knock-on effect on pay scales and result in disparities between pay for migrant and non-migrant workers. This may lead in time to sponsors, particularly smaller businesses, reducing their reliance on sponsored workers in preference to recruits from the domestic labour market.
Additionally, employees may pressure their employers to provide employer-led volunteering schemes; to grant more unpaid leave to pursue volunteering opportunities; or may submit flexible working requests, again to permit them to attend volunteering.
Additionally, employees may pressure their employers to provide employer-led volunteering schemes; to grant more unpaid leave to pursue volunteering opportunities; or may submit flexible working requests, again to permit them to attend volunteering.
Existing employees may also move to other employers offering better-paid roles if that would help them reach the Settlement threshold earlier; this could result in the loss of experienced staff.
In addition, there may be an impact on recruitment if other employers offer higher salaries to potential candidates; if migrant workers find public sector roles to be more attractive; or if employers offer structured volunteering opportunities.
This may lead to migrant workers prioritising roles which help to them “earn” Settlement faster, even if they are not the correct fit.
Therefore, whilst the Earned Settlement proposals place obligations on individual migrants, they are also likely to place economic and operational pressures on employers, especially in the lower-paid sectors.
What migrant workers and employers should do now
The consultation will also consider transitional arrangements; however, it is currently expected that the new rules would apply to anyone who has not already applied for Settlement when the changes take effect. Therefore, individuals who expect to qualify for ILR under the current rules in the near future, and for whom that was their intention, may be advised to apply as soon as they are eligible.
Employers should also start to review how these changes could affect their wage bill, employee relations, and workforce recruitment and retention.
MHA HR Solutions will be able to assist and advise you as an individual or an employer in navigating the new “Earned Settlement” landscape as and when the proposals are implemented. As Immigration Advisors regulated by the Immigration Advice Authority (IAA), we can assist you now with Sponsor Licence applications and Skilled Worker visa applications, and Spouse / Partner visa applications.
