Understanding the government's proposals for 'Earned Settlement' and the possible impact on workers and their employers

These proposals are not yet fixed, and there is still time to influence how the system will ultimately operate. A consultation has now opened, allowing any person or organisation to submit views. We understand that the Home Office is very keen to hear feedback – so if you believe these measures will adversely impact your employees or your business, now is the time to act.

What is settlement?

To get a grip on the terminology first of all: “settlement” and “indefinite leave to remain (ILR)” are terms used interchangeably. “Settled status” is usually the term for ILR granted via the EU Settlement Scheme (EUSS). All refer to a form of status allowing an individual to live permanently in the UK.

Although settlement still comes with some limitations—such as being lost after an extended period abroad (two years for non-EUSS migrants) and not conferring the same voting rights as citizenship—it provides certainty that someone can build a long-term future in the UK.

For most visa holders, settlement is the end goal after years of holding temporary forms of immigration status. For sponsored workers, obtaining settlement means their immigration status is no longer tied to their job, offering both stability and security. It also marks the point at which they can stop navigating complex immigration processes and paying significant visa fees.

While the eligibility rules differ between visa routes, most visa holders can currently apply for ILR after five years in the UK.

What are the plans for Earned Settlement?

The plans for earned settlement sit alongside a series of measures introduced through the Immigration White Paper aimed at reducing net migration. Unlike other proposals focused on new arrivals, earned settlement is specifically designed to reshape the long-term immigration landscape by altering who ultimately becomes permanently settled in the UK.

Following the surge in work-based migration during the so-called “Boris Wave” from 2021 to 2023, the government is concerned about the long-term impact of large numbers of sponsored workers progressing to ILR. The proposals therefore aim to make settlement significantly harder for many, with the intended effect of reducing the number of people who remain in the UK permanently.

The central change is to move the baseline qualifying period for settlement from five years to ten for most routes. From that point, individuals may be able to reduce or increase the qualifying period depending on a series of factors.

A notable departure from the current system is the proposal to treat family groups separately. At present, dependants usually qualify for ILR alongside the main applicant without needing to meet as stringent requirements as the main applicant. Under the new system, dependants would need to meet English language and contribution requirements themselves, which could create significant challenges for families.

Mandatory requirements

The proposals outline a set of mandatory criteria under specific “pillars” which all applicants must meet:

• Suitability – A clean criminal record and no outstanding NHS, tax, or government debt.
• Integration – The ability to speak English to level B2 (equivalent to A-level English).
• Contribution – Earnings above £12,570 for a minimum of 3–5 years.

The earnings requirement may create difficulties for individuals with lower incomes, those working part-time, dependants, or people who have taken time off for childcare, illness, or caring responsibilities. The consultation may need to consider how such circumstances will be treated.

Adjustments to the qualifying period for settlement

The baseline qualifying period for settlement, under the new system, would be ten years. Positive factors could reduce this period, while negative factors could extend it far beyond the current norms.

Reductions to the 10-year baseline

Some of these routes raise practical questions. For example, it remains unclear how the government will define “community work” or what evidence will be required. The high-earner fast track may also benefit only a small proportion of sponsored workers, given the salary levels required, which may be an issue employers want to raise in the consultation.

Increases to the 10-year baseline

The increase for RQF level 3–5 roles is particularly relevant to the health and social care sector, where medium skilled are common. Employers may wish to highlight in the consultation that these roles are critical to the UK economy and sectors which rely on them such as social care, already face severe shortages and costs pressures.

What does this mean for our employees on visas?

These proposals are likely to cause considerable concern, particularly for those facing a significantly longer route to settlement. Even at the lowest level, the system would introduce more complexity to applications. Those who end up subject to a 10- or 15-year qualifying period will face repeated visa costs and extended periods of insecurity on temporary visas.

With visa fees already running into thousands of pounds, the cumulative cost of multiple renewals under a longer pathway may simply be unaffordable for many workers.

Will these measures apply retrospectively?

Whether these measures will apply to people already in the UK is one of the most critical unresolved issues. The consultation document makes clear that the purpose of earned settlement is to limit the number of recent arrivals who progress to ILR. For this intention to be realised, the changes would likely need to apply retrospectively. If implemented, individuals who are currently close to qualifying suddenly facing many more years of temporary status, substantially higher costs, and prolonged uncertainty.  

This is not, however, set in stone. Transitional measures – which would exempt or create a softer regime for current visa holders – are options the government suggests it will consider. The consultation allows for any concerned by this to lobby for these measures.

Should I feed into the consultation?

Absolutely. The government has emphasised that it wants feedback on the effects of these measures. Many important aspects are still undecided, including:

• Whether the rules should apply to those already in the UK
• Which professions count as “public service occupations”
• Whether RQF level 3–5 roles should have a 15-year baseline
• How dependants and those with caring responsibilities will be treated
• Whether the accelerated high-earner route should be adjusted to be more inclusive.

While the impact will fall primarily on visa holders, employers also face serious implications. A longer pathway to settlement will mean more years of paying the Immigration Skills Charge and longer sponsorship periods, increasing administrative and compliance burdens. It also creates a higher risk of staff attrition if employees feel discouraged or insecure and reduces the competitiveness of the UK in international recruitment, talent may be drawn to countries who offer faster and clearer routes to permanent residency.

These measures will be particularly relevant for employers:

• Whose employees are unlikely to meet the £50,270 threshold
• In the public sector seeking to ensure their roles qualify for the 5-year reduction
• Who employ large numbers of medium-skilled workers (RQF 3–5), especially in social care, hospitality, construction, and manufacturing.

What happens next?

The consultation is open until 12 February 2026, and reports suggest that final rules will be in place by Spring 2026. Anyone who applies for ILR before then will still be assessed under the current rules, so eligible employees may wish to apply as soon as possible.

Employers should assess the potential impact on their workforce and consider communications to manage concerns, such as internal briefings or information sessions. However, much remains undecided until the consultation concludes.

We will be covering these changes in our review of the year in immigration law webinar - Reflecting on the past year and navigating the road ahead - at 9am on 10 December 2025. For more information and to register your attendance please click here.

If you would like help preparing a consultation response, please contact a member of our immigration team.