In May 2025 the government indicated that it would increase the period of time it would take some overseas nationals to qualify for indefinite leave to remain (ILR) from 5 to 10 years and that it would introduce the concept of earned settlement. There was however little detail, and it was unclear whether the changes would apply to those already in the UK. In November 2025 the government published further information in its consultation paper - Earned settlement - GOV.UK 

This consultation paper sets out some of the most significant changes to immigration policy in the last few decades and it appears that the intention is that the changes will apply to those already in the UK. The government is however seeking views as to whether any transitional arrangements should apply. The government is also consulting on increasing the baseline qualifying period for settlement from 5 years to 10 years and on increasing the qualifying period for those in the Skilled Worker route undertaking a role below RQF level 6 (i.e. undertaking a medium skilled role, rather than a highly skilled role) to 15 years. The government is also consulting on introducing a new condition that those with ILR will not be able to access public funds.

In addition, the government has indicated that there will be changes to the mandatory requirements for ILR applicants, including tougher English language and good character requirements and, very importantly, an unexpected and new requirement that the majority of adults applying for ILR will need to evidence taxable earnings of above £12,570 per annum, in either the 3 or 5 year period prior to applying for ILR.

The consultation closes on 12 February 2026 and it’s possible that the changes may come into effect as early as April 2026.

We consider below what this means for businesses and those already in the UK or coming to the UK.

What is ILR? 

ILR (Indefinite Leave to Remain), often referred to as settlement or permanent residence, is where a person has no time limit on their right to be in the UK and they are permitted to live in the UK without conditions and may work and study without restrictions and access certain public funds. An individual must obtain ILR before they are able to naturalise as a British citizen.

What is earned settlement? 

The consultation paper states that this is a principle intended to recognise long term contribution to the UK and to reward those who actively support the UK's social and economic fabric. The focus will be on good character, integration, contribution and residence.

Who will the proposed changes apply to? 

These changes do not apply to those who already have ILR nor to those with the right to be in the UK under the EU Settlement Scheme.

For those who hold immigration leave as the partner or spouse of a British citizen the current 5-year residency period for ILR will remain. Interestingly, the consultation paper indicates that this only applies to the partners of British citizens and not to the partners/spouses who hold leave on the basis of their relationship with someone who holds ILR, settled or pre-settled status in the UK. The consultation paper indicates that these individuals would be subject to the increased baseline qualifying period of 10 years. 

It also appears that the partner/spouse of a British citizen will still be subject to the mandatory provisions proposed by the government (which are not subject to consultation), including the new contribution requirement of minimum earnings (further details below). This would be a fundamental change as it would, for the first time, effectively force partners of British nationals (and also adult dependants of those in the UK under other immigration routes) to evidence their own earned income in order to qualify for ILR.

Will the changes apply to those already in the UK? 

The consultation seeks views on the extent to which there should be transitional measures for those already in the UK on the pathway to settlement. Without any transitional arrangements, the changes would affect people already in the UK but who have not obtained ILR by the time the new rules come into effect. 

What is the new contribution requirement? 

One of the most onerous new requirements set out in the consultation paper is that adult applicants for ILR will have to show they have had annual taxable earnings above £12,570 for a minimum of 3 to 5 years. This is in line with the current threshold when someone starts to pay income tax and NICs. Only the length of time during which they need to have had these taxable earnings is subject to consultation.

This will have a considerable impact on partners of those working in the UK, many of whom currently do not work. It is also unclear what will happen if someone is unable to work for the requisite period e.g. due to sickness, maternity or other family friendly leave or if they have periods of unemployment.

What are the proposed new residency requirements for settlement?

These are complex but the basic premise is that the baseline qualifying residency period will be increased from 5 years to 10 years and that baseline qualifying period will then be adjusted upwards or downwards depending on different factors. These factors are set out in the two tables below. If more than one factor in the same table applies, then only the factor leading to the largest adjustment will be taken into account.

Effectively, these changes would mean that those earning less than £50,270 per annum would, in most cases, have to be in the UK for at least 10 years before they meet the residency requirements to apply for ILR. This means that it is the lowest paid who will be most impacted by these changes and who are also least likely to be able to afford the immigration fees to extend their immigration permission for such a lengthy period.

Considerations that will reduce the baseline qualifying period - only the factor causing the largest adjustment will be taken into account. 

Considerations that will increase the baseline qualifying period - only one of the listed considerations (i.e. the one that causes the largest increase) would be applied in the case of any single application. This will take precedence over any reduction to the baseline.
 

Will there be changes to the English language requirement? 

When the new rules are introduced, applicants for ILR will need to meet English language requirements at B2 level under the Common European Framework of References for Languages (CEFR). This is broadly similar to an A Level taken as a foreign language. This is a significant change as the current requirement is B1 level – broadly akin to GCSE English. The government is not consulting on this change. 

Those applying for ILR will still need to pass the Life in the UK test. 

What will the changes be to the character requirements? 

Applications for ILR will be refused once the changes come into effect where mandatory requirements relating to character and conduct are not met. Full details are still awaited but the government has made it clear that individuals with a criminal record should not be able to settle permanently in the UK. Further, under the proposed new rules, anyone applying for ILR must have no litigation, NHS, tax or other government debt. The government is not consulting on these changes. 

Will there still be a long residency route? 

At the moment, those who have been in the UK lawfully for at least 10 years may be eligible to apply for ILR. This route will no longer exist under the proposals. Anyone who has been in the UK for at least 10 years should explore as a matter of urgency whether they may be able to apply for ILR under the long residency routes before the changes to ILR come into effect. 

Will individuals with ILR be able to claim public funds under the proposed new rules? 

The consultation seeks views on whether the law should be changed so as to make settlement subject to a “no recourse to public funds” condition. This would mean that new migrants granted settlement would be unable to access specified benefits in line with existing immigration conditions. This means that overseas nationals would only be able to obtain access to certain benefits if they went on to obtain British nationality.

This is a very significant change, especially as not everyone will want to obtain British nationality, often because they may not be permitted to hold dual nationality and so would not want to give up their original nationality. This would mean that overseas nationals could spend significant parts of their life in the UK, paying tax and NICs in the same way as British nationals and yet never be eligible for certain benefits. 

How will the changes affect spouses or partners of economic migrants? 

At the moment, dependants of economic migrants, such as dependants of Skilled Workers, are often able to qualify for settlement at the same time as the main applicant is granted settlement. 

The government has indicated that this approach will substantially change under the earned settlement system. Instead, the qualifying period for settlement for a person with immigration permission as the adult dependants of an economic migrant (e.g. of a Skilled Worker) will be separately determined according to their own attributes and circumstances (although dependants will still only be able to obtain ILR where the main applicant qualifies for ILR). This will mean that a dependant of an economic migrant, such as the dependant of a Skilled Worker, may have a longer qualifying period for settlement compared to their partner and their partner or spouse may have to wait for many years to be eligible e.g. because they are unable to meet the mandatory English language requirements or minimum income contribution threshold.

How will this impact children of economic migrants?

This is still unclear. The consultation paper acknowledges that, in the case of children, many of the requirements in the earned settlement model, such as paying NICs or meeting an earnings contribution threshold, cannot be met by those who are under 18 at the point that their parents become eligible for settlement. The government also acknowledges that it will need to consider further the position of those dependants who turn 18 during their parents’ qualifying period and the extent to which they should be brought within the earned settlement principles and be expected to qualify for settlement in their own right.

The consultation questionnaire therefore includes questions seeking views on how dependants should be accommodated within an earned settlement system. The Home Office has indicated that they are likely to include specific rules which would provide a window during which those who were originally granted permission as a dependent child when they are under 18 can be granted settlement (or a limited permission to extend their stay) at the same time as their parents, even if they are over 18 at that point.

We understand that there is likely to be a cut-off point, linked to age, at which point a dependant will transition to an immigration pathway under which they progress to settlement in their own right. This could, for example, involve specifying an age limit below which some mandatory requirements (including the requirement to have paid NICs in the 3 years prior to applying for ILR) are waived.

Another concern is that, in most cases, under current immigration laws, a child dependant is only able to obtain ILR if both parents have ILR. Therefore, if one parent is unable to apply for ILR then the child will also be unlikely to be able to obtain ILR. 

This all leaves those with children in an uncertain position. There may be some limited comfort in that the government has said it intends to ensure children who have been in the UK for most of their life, turn 18 and discover they do not have status, are fully supported and able to regularise their status and settle. It is however far from clear how this will work in practice. 

Will anyone benefit as a result of the proposed changes? 

Under the proposals, those who have earned a taxable income of £125,140 per annum during the 3-year period prior to applying for ILR would potentially be able to apply for ILR after only 3 years’ continuous residence in the UK. Therefore, high earners, who are from English speaking countries or who have a degree taught in English and who have no dependants will benefit under these proposals.

What will the impact be on businesses? 

The proposed changes would have a significant impact on businesses who rely on overseas talent. These include:

• Overseas national employees who are in the UK but who do not yet have ILR are likely to be finding this period of uncertainty difficult and stressful, especially if they are lower earners and/or have dependants. Businesses should consider whether they can assist by keeping employees informed of developments.
   
• When making job offers to overseas nationals – especially those who would be relocating to the UK - businesses should be transparent with the prospective employee and let them know about the proposed changes to the law in relation to ILR and how the changes would affect them and their dependants.
   
• Employers may wish to offer to pay for immigration advice for those already in the UK and those relocating to the UK or at least encourage the individual to take advice. This is especially important if the employee is keen to move to the UK on a long-term basis and would be relocating with family.
   
• The immigration changes will no doubt deter at least some individuals from coming to live and work in the UK. The potential extended residency period, tougher English language threshold and the requirement for adult dependants to evidence their own earned income to obtain ILR, as well as uncertainty as to their children’s long term ability to remain in the UK, may well sway someone’s decision on whether to relocate to the UK. For top global talent with work opportunities elsewhere, this will make the UK option much less attractive.
   
• Employers sponsoring individuals under the Skilled Worker category will, in many cases, need to sponsor individuals for a longer period for them to reach ILR. The exception will be those earning a taxable income of £125,140, who may be able to apply for ILR after just 3 years. However, if an individual does not benefit from any reductions to the baseline qualifying period and needs to be sponsored for a 10-year period, or even possibly 15 years for those undertaking jobs below RQF level 6, (rather than the current 5 year period) this will result in additional immigration application fees of at least £12,451. These are the fees for the main applicant and do not account for the additional cost of dependant application fees or management time or legal fees involved in extending sponsorship or immigration permission.
   
• Employers will need to consider their approach to these costs carefully. For example, will they offer to cover the immigration fees to encourage individuals to take up a role in the UK? Will they require the individual to pay back certain fees (to the extent permitted) if they leave their job early?
   
• If those under the Skilled Worker route take longer to qualify for ILR, sponsors will also be subject to the onerous sponsor compliance obligations for longer, including the reporting and record keeping obligations. We are also in a climate where the government is cracking down on sponsor compliance and illegal working and so sponsors need to take these obligations seriously in order to avoid sponsor compliance action including, worst case scenario, losing their sponsor licence altogether. Compliant right to work checks would also need to continue to be undertaken for a longer period.
   
• Businesses will need to consider salaries carefully for overseas nationals, particularly where the individual is close to the salary thresholds required to reduce the qualifying period for ILR. This will be especially relevant for those close to the £50,270 earnings threshold as, if the sponsor can pay at this level (for at least 3 years before the ILR application is submitted), it could reduce the period they will need to sponsor the individual from 10 years to 5 years, saving the additional sponsorship and management costs.
   
• Income thresholds are likely to be based on taxable earnings so careful consideration will need to be given where overseas migrants enter into any salary sacrifice arrangement which would have the effect of reducing their taxable income below the required threshold. Employers should ensure they highlight this risk in any salary sacrifice documentation.
   
• Businesses will need to take care to ensure that their sponsored workers do not break their continuous residence e.g. by undertaking a secondment overseas or a sabbatical.
   
• Employers may wish to consider whether to encourage their sponsored workers to participate in any volunteering opportunities or even to allow them time off to volunteer so as to reduce their qualifying period for ILR.
   
• Consideration will need to be given to how their employees who are already in the UK will meet the increased English language requirements for ILR which will be mandatory for all applicants, including for adult dependants. Businesses could consider providing English language classes for individuals (and possibly even for their dependants) where there is any concern as to whether they will meet the higher B2 level.

What are the other impacts for individuals? 

• These changes will mean that many individuals will be forced to live with significant uncertainty whilst they hold their UK immigration leave. Depending on the outcome of the consultation, any normal but unfortunate life events, such as illness, redundancy or loss of their job could mean that the individual and/or their partner does not qualify for ILR or that they may have to wait far longer. This brings with it additional significant costs of extending their immigration leave for them and any dependants which run into thousands of pounds for each dependant.
   
• Assuming the current rules around continuous residency continue to apply, individuals will need to take care not to break their continuity of residence and ensure they do not spend more than 180 days outside of the UK in any 12-month period e.g. by undertaking an overseas secondment or taking a lengthy sabbatical.
   
• The new mandatory minimum income contribution requirement is clearly an issue. We anticipate this will put women in a particularly vulnerable position given that they will have to be able to evidence annual taxable earnings of above £12,570 for a stipulated period of time in order to obtain ILR and they are more likely not to work in order to bring up children. It is telling that one of the questions in the consultation paper is whether those on maternity leave or long-term illness or disability should be exempt from the earned income requirement. It is astounding that this is not a given and is subject to consultation.
   
• Individuals will need to consider their taxable earnings and, for example, may need to work full time rather than part time. This will be especially relevant for those close to the relevant salary threshold as, if the individual is able to be paid at this level (for at least 3 years before the ILR application is submitted), it could reduce the residency period to either 3 or 5 years.
   
• Income thresholds are likely to be based on taxable earnings so careful consideration will need to be given before entering into any salary sacrifice arrangement which would have the effect of reducing taxable earnings below the required minimum threshold.
   
• There is huge uncertainty for families as to whether the main applicant’s dependants will be able to obtain ILR at all. The mandatory earned income requirement in particular discriminates against stay-at-home parents (again which affects predominantly women). Under these provisions, adult dependants will need to be in paid work for lengthy periods in order to obtain ILR.
   
• There is a risk that the main applicant may be able to obtain ILR, but the partner and children are not able to meet the requirements. Given the increases to the residency period for settlement, more relationships are also likely to break down during the relevant period. If the couple do have relationship issues in the relevant period there’s likely to be more pressure to stay together so as not to scupper the partner and children’s ILR eligibility. It is also very unclear at present when or how children who have come to the UK as dependants and since turned 18 may be able to qualify for ILR.
   
• If children are not able to qualify for ILR at all or until much later, it will impact the level of University fees for them to study in the UK. Without ILR they will not be considered a home student and will therefore be subject to the much higher overseas student fees.
   
• Individuals may need to consider whether or not they should undertake voluntary work whilst they are in the UK in an effort to reduce the period of residency required for ILR. This is relevant to those with taxable earnings of below £50,270 which appears grossly unfair given that it is the lower earners who would be pushed to make time in their busy schedules to volunteer.
   
• Individuals already in the UK should consider at an early stage whether they and any adult dependants will be able to meet the higher English language threshold and consider taking lessons if required to ensure they will meet this requirement for ILR.
   
• The potential closure of the 10 year long residence ILR route will particularly affect those who came to the UK as young students and have since switched into other immigration routes in the UK (such as Graduate/Skilled Worker). As flagged, we urge anyone who may qualify under this route to consider submitting an application on this basis before the rules change (which could be as early as April 2026).

Who should respond to the consultation? 

These proposed changes are so fundamental that we encourage all affected businesses and individuals to respond to the consultation survey which is open until 12 February 2026 - Earned settlement - GOV.UK. Please contact us if you would like advice on preparing your response.