Earned Settlement: What the New Rules Mean for Employers

Why should I read this?

On 2 November 2026, the Home Office published its response to the consultation on “A Fairer Pathway to Settlement”. The response confirms a new system for indefinite leave to remain (ILR), which the government calls “earned settlement”. The response confirms the next steps towards a commitment originally made in the government’s Immigration White Paper published in May 2025.

What will the new rules involve?

Under the new rules, the default wait for ILR will rise from five years to ten years, with faster or slower pathways linked to specific factors such as character and contribution. Sponsored workers will remain tied to their employer for longer, increasing sponsorship costs. Workers on lower pay face the biggest change, with consequences for recruitment, retention, pay and workforce planning. The response does not confirm a timetable for the new rules to take effect; however, the Home Secretary has announced that the changes will begin to be laid from the December 2026 Immigration Rules and will be implemented over the course of 2027.

What has changed since the consultation?

The consultation ran from 20 November 2025 to 12 February 2026 and received over 200,000 responses. The government has made three significant changes to its proposals following consultation:

• It has dropped the proposed 15-year route for workers in roles below degree level
• Volunteering will no longer shorten the wait
• C1 (advanced) English will no longer provide a shorter route

Removing the proposed 15-year pathway is a positive development for employers of workers in occupations below RQF level 6. These workers will generally be subject to the ten-year pathway, although they may qualify sooner if they meet the requirements for an accelerated pathway.

The new settlement pathways

Wait	Who qualifies	Main earnings test
3 years	Highest earners and the highest talent group	£125,141 a year in three of the last four years
5 years	Higher earners, eligible health and education workers, and people with a British connection	£50,271 a year in three of the last five years
10 years	The new default for everyone else	£12,571 a year in five of the last seven years
20 years	People whose immigration non-compliance or access to public funds prevents them from qualifying for an earlier pathway	£12,571 a year in five of the last seven years

The thresholds are linked to the income tax bands and will move with any future changes to those bands. Earnings are assessed using a “best years” approach over a longer period, so maternity leave, caring responsibilities or illness need not result in a longer route to settlement. Couples can also combine their income, with a household threshold of £25,142 a year.

Pay will therefore play a significant role in how quickly a worker can settle. Skilled Workers earning below £50,271 will face a ten-year wait, double the current five-year period, while a pay rise above £50,271 could halve that wait. Employers may therefore see more requests for pay rises linked to settlement and may need to consider how this interacts with existing pay structures.

Minimum requirements for every applicant

Subject to limited exemptions, every applicant must meet five requirements. Higher earnings cannot compensate for failing any of them:

• Meet the strengthened good character and suitability requirements, including in relation to criminality
• No unpaid government debt, including NHS (National Health Service) charges, tax, National Insurance and Home Office legal costs
• English at B2 level
• A pass in the Life in the UK test
• A record of sustained earnings of at least £12,571 a year

An adult who overstays, breaches a visa condition or uses deception will move onto the 20-year route.

Criminality will be assessed more strictly under the new system, meaning that offences may have greater consequences for settlement than they do under the current rules. This could affect the ability of employers to retain sponsored workers they had expected to remain in the UK long term.

Which routes count towards ILR?

The Home Office plans to close the ten-year long residence route. Time spent on temporary routes will no longer count towards ILR. These routes include:

• Student and Graduate
• Global Business Mobility
• Temporary Worker routes, including Seasonal Worker
• Youth Mobility and High Potential Individual

Time spent on the Skilled Worker, Global Talent, Scale-up, Innovator Founder and UK Ancestry routes will still count. However, not all immigration routes qualify for every settlement pathway. Applicants must hold permission on a route eligible for the relevant pathway and meet the applicable contribution, integration, character and residence requirements. Eligibility for the shorter three- and five-year pathways will therefore depend on the route held and the relevant earnings, public service, British connection or highest talent criteria.

Time spent on the Graduate and Global Business Mobility routes will not count towards settlement. Employees on these routes will begin building qualifying residence only when they move onto an eligible route. Employers intending to retain them in the UK long term may therefore wish to consider an earlier switch to the Skilled Worker route.

Dependants

A partner who arrives with the main applicant can settle at the same time, while a partner who joins later must complete the same qualifying period. Children under 18 can settle with their parents, and young adults aged 18 to 24 can settle with their family without an earnings test. Dependants aged 25 or over must qualify in their own right.

These rules may also affect retention. For employees with families, a longer or different route to settlement for their dependants may influence whether they remain in the UK, particularly where they have older children.

Transitional protection

The government has rejected a general exemption for people already in the UK. Protection is limited to three groups:

• Care workers who were on the route before the May 2025 Immigration White Paper will keep a five-year route. They must earn £25,000 a year and meet the other requirements

• Health and education workers below degree level on national pay scales will keep a five-year route if they arrived before May 2025

• Skilled Workers who benefit from the pre-April 2024 transitional arrangements will be able to continue extending their visas on those more favourable terms until 2035, rather than 2030. This is intended to ensure that workers in below-RQF6 roles who now face a ten-year route to settlement can continue to extend their permission while they complete the longer qualifying period

From 1 February 2027, care workers who lose their employment because their sponsor’s licence is revoked will have up to 120 days to secure a new job offer, followed by a further 60 days to resolve their visa and employment status.

Most current sponsored workers will receive no protection. The new rules will apply to them when they apply, so employers should explain this risk to staff early.

What happens next?

The Government will publish further technical and operational guidance before implementation. Changes will begin to be laid from the December 2026 Immigration Rules and will be implemented over the course of 2027.

Key actions for organisations

• Map each sponsored worker’s date of qualification for ILR taking into account previous qualifying routes

• Map sponsored workers’ earnings against the new thresholds and consider salary progression to date of ILR

• Review immigration assistance policies and consider whether ILR costs and extended sponsorship periods will be funded, and whether clawback provisions are appropriate

• Budget for longer sponsorship periods and sponsorship costs over a ten-year period

• Review pay and promotion plans for staff near the £50,271 threshold

• Consider how responses will be made to workers who request pay rises for settlement purposes

• Update retention plans for staff facing a longer wait

• Consider the dependant position as staff may need longer sponsorship to allow dependants to apply together, or where dependants cannot meet the requirements

• Tighten checks on sponsor duties and right-to-work compliance, and consider how compliance can continue to be resourced and met with a larger Skilled Worker population

• Brief staff on the B2 English, criminal record and other requirements and consider putting together an FAQ

• Consider providing support for staff on the B2 English and Life in the UK requirements

• Track the Home Office guidance and start date

How we can help

Our global mobility and immigration team advises employers at every stage of sponsorship and settlement. We can review sponsored workforces against the new rules, help organisations plan their pay, reward and retention approaches, and train HR and global mobility teams on the changes.