UK Business Immigration: A radical shake-up of Indefinite Leave to Remain

In the White Paper released by the Home Office in May 2025 (Restoring control over the immigration system), the Home Office outlined its proposal to increase the standard qualifying residence period for settlement from 5 years to 10 years. 

Along with this suggestion was the announcement of an “earned settlement” model. This suggested that migrants could have the opportunity to settle before reaching 10 years based on their contribution to the UK, subject to a consultation this Autumn. 

Under the current system, Skilled Worker migrants can settle after spending 5 years in the category, subject to the requirement of not spending more than 180 days outside of the UK in any 12-month rolling period, and passing the Life in the UK test. 

On 20 November 2025, the Home Office opened the consultation to the earned settlement model. The consultation sets out the government’s proposed structure of earned settlement.  Settlement will no longer be granted after a fixed period based on time spent in the UK and migrants will instead need to demonstrate additional criteria relating to conduct, contribution and integration.  We have set out below the key points that employers should have on their radar.  

Minimum requirements 

The minimum requirements proposed for settlement within the consultation paper are as follows:

• The application meets the suitability requirements (in the newly reformed Appendix Suitability, setting out grounds for mandatory refusals). This would rule out settlement for those with criminal convictions.
• The applicant has no current litigation, NHS, tax or other government debt.
• The applicant meets an English Language threshold of B2 under the Common European Framework of Reference for Languages (this is higher than the current standard of B1, and means that the applicant is an independent user and can understand more complex texts).
• The applicant passes the Life in the UK test (which is also set to be reformed).
• The applicant has annual earnings of above £12,570 for a minimum of 3-5 years before the date of application – in line with current thresholds for income tax and national insurance contributions. 

Meeting the requirements above would lead to a baseline ILR qualifying period of 10 years. This can be reduced or increased based on the factors below. 

Factors that would decrease the baseline qualifying period 

It has been proposed that the following requirements would reduce the baseline qualifying period of 10 years for an ILR applicant. The consultation implies that only one “attribute” can be used to reduce the qualifying period – i.e. the one leading to the greatest reduction.

• Passing an English Language test at the higher level of C1, i.e. an advanced level of English for proficient users (a 1-year reduction proposed).
• Applicant has earned a taxable income of £125,140 for 3 years immediately prior to application date (a 7-year reduction proposed which would mean that ILR could potentially be achieved within 3 years as opposed to the proposed 10 years, and the current 5 years).
• Applicant has earned a taxable income of £50,270 for 3 years immediately prior to applying for settlement (a 5-year reduction proposed which would mean that ILR could potentially be achieved within 5 years as opposed to the proposed 10 years).
• Applicant has been employed in a specified public service occupation at level RQF 6 (i.e equivalent to degree level) or above (a 5-year reduction proposed which would mean that ILR could potentially be achieved within 5 years as opposed to the proposed 10 years).
• Applicant has worked in the community (e.g. volunteering) (a 3 - 5 year reduction proposed which would mean that ILR could potentially be achieved within 5 - 7 years as opposed to the proposed 10 years).
• Applicant has 3 years’ continuous residence in the global talent or innovator founder category (a 7-year reduction proposed which would mean that ILR could potentially be achieved within 3 years as opposed to the proposed 10 years).

Factors that would increase the baseline qualifying period 

Interestingly, the consultation proposes considerations that would increase the baseline qualifying period; in some instances increasing it by as much as 20 years leading to an individual having to have 30 years in the UK before being eligible for ILR. Some of the proposes include:

• Applicant has been in receipt of public funds for less than 12 months (a 5-year increase proposed which would mean that ILR would be achieved in 15 years as opposed to the proposed 10 years).
• Applicant has been in receipt of public funds for more than 12 months (a 10-year increase proposed which would mean that ILR would be achieved in 20 years as opposed to the proposed 10 years).
• Applicant arrived in the UK illegally (a 20-year increase proposed which would mean that ILR would be achieved in 30 years as opposed to the proposed 10 years).
• Applicant entered the UK on a visit visa (a 20-year increase proposed which would mean that ILR would be achieved in 30 years as opposed to the proposed 10 years).
• Applicant has overstayed permission for 6 months or more (a 20-year increase proposed which would mean that ILR would be achieved in 30 years as opposed to the proposed 10 years).

Additional consultation points 

The Home Office is also seeking views on whether the baseline qualifying period for those in roles below RQF 6/Degree level (e.g. for those in the healthcare sector) should be increased to 15 years instead of 10 years. This would involve workers needing to stay in the Skilled Worker route for longer, resulting in further fees being incurred by UK employers (and in many cases applicants) to be able to settle long-term.

Additionally, views are sought on whether settlement (particularly for those who have just settled) should have a “no recourse to public funds” condition attached. This would make access to benefits shift from being available at the settlement stage (as is the currently position) to only being available at the citizenship stage.

The Home Office are further seeking views as to how dependants should be considered in the earned settlement model. One implication is that dependants would need to meet the mandatory criteria to settle (so would need to be working to earn at least the £12,570 threshold). However, there is also the implication that if a main applicant was not eligible to settle (i.e. by way of their criminal convictions), then dependants would also lose their eligibility. 

Crucially, the Home Office seeks views on whether transitional arrangements should apply. The Home Office have previously hinted that a system would be sought that applies both to new entrants to the UK in the Skilled Worker and other routes, and to those who are already in the UK. This is a deviation from usual policy whereby changes are not applied retrospectively if you are already in the UK. 

We note that EU nationals with pre-settled and settled status under the EU Settlement Scheme (EUSS) are not affected by these changes.

The impact 

Increasing the qualifying period to 10 years (or in some cases 15 years) drastically drives up recruitment costs for employers. With 5-year visas costing circa £14,000 now (for medium/large sponsors), the long-term costs for sponsors would be huge.  The longer period of time until settlement would also leave employers and sponsors in a state of uncertainty. 

Changes to settlement and citizenship work alongside each other, and any changes to nationality laws must be made in primary legislation. However, immigration is seemingly still top of the government’s agenda, and changes to settlement on their own can be done via immigration rule updates. 

We therefore recommend that employers respond to the consultation should they have any concerns.