UK Immigration Update: Major Overhaul of Settlement Rules Proposed

Home Secretary Shabana Mahmood has announced sweeping proposed reforms to the UK’s immigration system, introducing a new contribution-based model for Indefinite Leave to Remain (ILR) or settlement. The changes are significant. 

The starting point for settlement will move from 5 to 10 years. Applicants will need to meet specific criteria to qualify for ILR. 

The government is consulting on a series of conditions that could either add to, or subtract from, the baseline 10-year qualifying period. 

The Home Secretary has stated: 

“…An earlier settlement could be available to those who make an outsized contribution to our national life, such as high-talent, high taxpayers; those who have worked at a certain level of seniority in our public services; or those who have volunteered extensively in their local communities”.

Essentially, the proposed changes aim to reward migrants who make sustained economic and social contributions, while significantly extending the path to settlement for others.

Who Will Be Affected?

The changes will apply to individuals already in the UK who have not yet been granted ILR. The policy statement has specifically identified those with status under the EU Settlement Scheme as being outside the scope of the planned reforms and the consultation, in addition to grants of settlement under the Windrush Scheme.

It remains undecided whether transitional arrangements will be introduced. 

Given the scale of the reforms and their potential impact on individuals and businesses, we will strongly advocate for transitional protections—particularly for those with long-standing lawful residence.’

Key Changes at a Glance

Earned Settlement 

The Home Secretary has emphasised that settlement is ‘not a right but a privilege’, and that the current requirements for settlement do not sufficiently reflect this. As a result, she has introduced the new system of Earned Settlement, with the standard qualifying period for settlement increased to ten years, and the requirements for settlement now built on ‘four core pillars.’

Character 

Applications will be refused where key elements are established relating to an applicant’s character and conduct, including the presence of a criminal record and failure to comply with immigration requirements.

An applicant must additionally have no current litigation outstanding against them, or NHS, tax or other government debt.

Integration 

Applicants must demonstrate meaningful engagement with British society, including evidence that they have English language competency at B2 level or above under the Common European Framework of Reference for Languages, and that they have passed the Life in the UK test.

Contribution

Applicants must have annual earnings above £12,570 for at least 3 to 5 years, where the minimum period required will be confirmed following the consultation, or an alternative amount of income.

Residence

Only lawful, continuous residence in the UK is considered – periods without lawful permission will not be counted.

Many aspects of the above are already required for existing applications, including the need to pass the Life in the UK test, and meeting suitability requirements, but these pillars are now mandatory for any settlement application to be successful.

Changes to qualifying period

The standard 10-year qualifying period of continuous residence will be adjustable upwards or downwards, depending on the individual circumstances of the case. The proposed adjustments are still subject to consultation, but the following factors have been identified as potentially impacting the baseline qualifying period:

Integration

If an applicant displays competency in the English language at C1 level under the Common European Framework of Reference for Languages, the qualifying period will be reduced by 1 year.

Contribution

This area represents the most significant changes to the qualifying period and provides significant benefits to those who are higher earners. The following reductions have been identified for consultation:

• Applicant has earned a taxable income of £50,270 for 3 years immediately prior to applying for settlement – reduction of 5 years
• Applicant has earned a taxable income of £125,140 for 3 years immediately prior to applying for settlement – reduction of 7 years

Although these thresholds currently equate to the current thresholds for payment of Income Tax at the higher and additional rate, it is provided that these would not be tracked to future changes to the tax system.

It is additionally provided that employment in a specified public service occupation for 5 years will lead to a reduction of 5 years, whilst those who contribute to their community, such as volunteers will receive a reduction of between 3 – 5 years.

An applicant in receipt of public funds will need to wait significantly longer before they can qualify for settlement. If an applicant has received public funds for under 12 months during their route to settlement, their qualifying period will increase by 5 years. If they have received public funds for over 12 months in this period, the increase will be 10 years. 

It is additionally suggested that those sponsored to work in the UK in occupations below graduate level (RQF Level 6) may have their baseline qualifying period to 15 years. 

Entry and residence

Those with permission as the partner, parent or child of a British citizen, or under the British National Overseas Route will attract a reduction of 5 years and therefore remain unchanged from their current required residence period, subject to the new mandatory requirements.

High-skilled individuals are additionally highlighted as making important contributions to the economy through their skillsets, where those with 3 years of continuous residence under the Global Talent or Innovator Founder routes will benefit from a reduction of 7 years, with an accelerated pathway to settlement. 

Applicants who have overstayed their leave in the UK for 6 months or more, entered the UK on a visit visa or arrived in the UK illegally will potentially receive an increase of up to 20 years to the baseline qualifying period.

Overall, it therefore appears possible that certain cohorts of individual can apply for settlement sooner: 

• 3-Year Route:
  • Annual taxable income of £125,140+
  • 3 years on a Global Talent or Innovator Founder visa
• 5-Year Route:
  • Annual taxable income of £50,270+
  • Public sector workers
  • Partners, parent, child of British citizens
  • British Nationals (Overseas) from Hong Kong

Under the proposed changes, the 10-year Long Residence Route would no longer be available – these individuals would need to meet the standard requirements as above.  

No Benefits Without Citizenship

The consultation also looks to consider whether individuals granted settlement should no longer be eligible for public benefit, where settlement would potentially be subject to a “no recourse to public funds” condition. Access to such support would therefore be reserved exclusively for British citizens.

Consultation 

The consultation on the proposed changes and the conditions to meet for settlement can be found here: “A Fairer Pathway to Settlement: A statement and accompanying consultation on earned settlement”. 

The consultation is open to anyone who wishes to share their views, including individuals, organisations, and other stakeholders who may be affected by or have an interest in the proposed changes. It will run for 12 weeks - the consultation is open until 12 February 2026, with potential implementation of the changes in the months following this date.

It’s crucial that individuals and employers submit responses to shape the final policy. 

Understandably, the proposed changes will certainly cause concern and uncertainty for a lot of individuals – if you are due to apply to for settlement, it is better to make the application as soon as you are eligible to do so. You may not need to wait until closer to your current visa expiring before making the application.