New Earned Settlement system on the horizon: considerations for sponsored workers and their employers

The government’s proposed ‘Earned Settlement’ reforms could double the time many sponsored workers need to wait for settlement, with significant implications for employers, workers and their families.

The proposals, first outlined in the May 2025 White Paper, ‘Restoring control over the immigration system’, signalled the government’s intention to introduce a new model of Earned Settlement. The accompanying consultation, ‘A fairer pathway to settlement’, was published in November 2025 and set out the detailed proposals. The new regime will be implemented through amendments to the Immigration Rules, replacing the current system for qualifying for settlement.

The Home Secretary has said that the changes will be implemented in autumn 2026, rather than April 2026 as originally planned, and will apply retrospectively. This article explores the impact of the proposals on sponsored workers, their dependants and their employers.

What is settlement?

Settlement, or indefinite leave to remain (ILR), is the right to live permanently in the UK without conditions on accessing the labour market or public funds. It’s also a prerequisite for naturalisation as a British citizen.

Currently, settlement is available after a qualifying period of continuous residence, typically five years, on an eligible immigration route such as the Skilled Worker route (although some routes, such as the Innovator Founder route, allow settlement after three years).

The Long Residence route separately allows settlement after 10 continuous years, even across routes that don’t normally lead to settlement. Of approximately 70 immigration routes, around 40 lead to settlement.

How is settlement changing?

Under the new Earned Settlement regime, settlement for those in non-family-based immigration routes will no longer be based on residence alone. Instead, a default baseline qualifying period of 10 years will be adjusted upwards or downwards depending on factors built on four core pillars: character, integration, contribution and residence.

Some aspects will operate as mandatory eligibility requirements (failure to meet any one resulting in refusal regardless of residence length), while others will determine whether the qualifying period should be shortened or extended through what have been termed ‘accelerating’ and ‘decelerating’ factors.

Crucially, these changes are expected to apply retrospectively to anyone currently on a route to settlement, as well as to new entrants.

Key changes include:

• A higher baseline qualifying period for most applicants, increasing from five years to 10 years’ continuous residence
• A proposed baseline of 15 years for those in roles below RQF level 6 on the Skilled Worker and Health and Care routes
• A mandatory requirement for applicants to demonstrate annual taxable earnings above £12,570 (in line with the current threshold for paying income tax and National Insurance contributions) for a minimum of three to five years (subject to consultation)
• ‘Acceleration’ of the baseline qualifying period for factors such as volunteering, having a higher salary, holding a Global Talent or Innovator Founder visa and working in public service roles like teaching or in the NHS
• ‘Deceleration’ of the baseline qualifying period for those in receipt of public funds, those who entered the UK illegally, those who entered on a visitor visa and those who have overstayed their permission for six months or more
• The government’s stated expectation that applicants shouldn’t be able to settle with a criminal record, with revised criminality thresholds to be set out in due course following a root and branch review
• The English language requirement being raised to B2 level (with a one-year reduction for C1 proficiency) and applicants having no outstanding litigation, NHS, tax or other government debt
• The abolition of the standalone Long Residence route, with its function replaced by the adjustable baseline qualifying period within the Earned Settlement framework, meaning that residence alone will no longer be sufficient to qualify for settlement.

It’s important to note that these changes will not affect those with settled status under the EU Settlement Scheme or the Windrush Scheme, both of which are fully exempt. Partners and dependants of British citizens, British National (Overseas) (BN(O)) visa holders and members of HM Armed Forces and their families are expected to retain their current arrangements.

Practical considerations for sponsored workers and their employers

Increased fees and compliance

The Immigration Health Surcharge (currently £1,035 per year), the Immigration Skills Surcharge (currently between £480 and £1,320 per year) and application fees are already a significant investment. Doubling the baseline qualifying period will correspondingly increase overall costs and employers may struggle to justify sponsoring a worker for an additional five to 10 years.

Loans and clawback agreements may become more common, further tying workers to their employers. The extended sponsorship period will also prolong employers’ Home Office compliance obligations.

The wide array of accelerating and decelerating factors will also make each individual’s qualifying period unique, reducing certainty for employers around costs and the duration of sponsorship. Those in roles below RQF level 6 face a particularly precarious position: many expected to wait five years for settlement but may now have to wait 15 years under the proposed baseline for this group.

Impact on dependents

Currently, dependants generally qualify for settlement at the same time as the main applicant without separate contribution requirements. Under the new model, adult dependant partners will have their own qualifying period assessed independently. They will need to evidence earnings of at least £12,570 per year for three to five years.

Dependants who are carers, full-time parents or in part-time work may struggle to meet this threshold, potentially waiting considerably longer than the main applicant. Children who turn 18 during the qualifying period may also be expected to qualify in their own right, subject to safeguards, thereby extending the overall qualifying period for settlement for dependents far beyond that of the main applicant.

Settlement and access to public funds

The consultation also proposes that settlement should no longer automatically entitle the holder to access public funds, with eligibility instead reserved for British citizens. This would require primary legislation and would be subject to greater parliamentary scrutiny than the Immigration Rules changes.

Conclusion

The Earned Settlement proposals present significant challenges for both sponsored workers and their employers. For individuals, the retrospective doubling or tripling of qualifying periods, mandatory earnings thresholds, raised English language requirements and independent assessment of dependants’ eligibility introduce considerable uncertainty into career and life planning, particularly for those who relocated to the UK expecting a five-year path to settlement.

For employers, substantially increased costs, prolonged compliance obligations and individualised qualifying periods risk making the UK less competitive in attracting global talent.

However, there are grounds for optimism. The consultation process remains open, implementation has been delayed until autumn 2026 and the inclusion of accelerating factors – rewarding higher earnings, public service roles, advanced qualifications and volunteering – means that many skilled workers in professional occupations may still achieve settlement well before the 10-year baseline.

Employers who proactively support their sponsored workers through language training and role structuring aligned with accelerating criteria will be better placed to retain talent, and sector-specific representations are likely to shape the final rules.

Early, informed planning is essential. Both workers and employers should review their positions now, identify applicable accelerating factors, ensure earnings and tax records are in order and plan for dependants’ independent qualifying periods.