Major Reform to UK Settlement (ILR): What Today’s Announcement Means for Migrants and Employers

The Home Office has published plans for the most significant reform to the UK settlement (Indefinite Leave to Remain) system in almost 50 years. If implemented, these proposals will fundamentally change who can settle in the UK and how long it will take.

These changes are not in force yet and may change, but the intention is clear: the UK is moving towards a contribution-based settlement model with longer qualifying periods for many routes, new conditions, and stricter expectations around integration, character and economic contribution.

Below is a summary of what has been announced and what it could mean for individuals and employers.

A New “Earned Settlement” Model

Settlement (ILR) will no longer be a straightforward 5-year process for most people. The government plans to introduce a tiered system based on four pillars:

• Contribution
• Integration
• Character
• Residence

The length of time someone must live in the UK before qualifying for settlement will depend heavily on their circumstances, salary, tax contribution and route of entry.

New Settlement Durations

Under the proposed model:

Economic Migrants

• 10 years for most workers (double the current 5-year route).

Lower-Paid Workers

• 15 years for people who entered on lower-paid routes, including many who came under the Health & Care Worker route between 2022–2024.

Migrants Reliant on Benefits

• 20 years until settlement eligibility.

Illegal Migrants and Overstayers

• Up to 30 years before they could qualify for ILR.

Refugees

• 20-year route, although they may still access public funds during that time.

Groups Who Will Keep Shorter Routes

Some groups may still have access to shorter routes:

• Doctors and nurses in the NHS: 5-year route retained
• BN(O) visa holders and immediate family members of British citizens: 5 years
• Global Talent & Innovator Founder visa holders: may be eligible after 3 years
• High earners and higher-rate taxpayers: may qualify in fewer than 10 years, recognising their economic contribution

Who Will NOT Be Affected?

Those who already hold settled status will not be impacted.

Transitional Arrangements

A key question for many: What happens to people already in the UK and working towards settlement?

The government has stated:

Transitional arrangements will be consulted on, but the intention is that anyone who has not yet been granted ILR by the time the new rules take effect may be moved onto the new model.

This will cause understandable concern for migrants who believed they were on a 5-year path. Employers also need clarity to support workforce planning.

Immtell will be monitoring the consultation closely.

New Conditions for Settlement

The announcement also highlights new requirements likely to be tied to settlement eligibility, including:

• Being in continuous employment
• Having a clean criminal record
• Speaking English to a high standard
• Not relying on public funds
• Demonstrating integration, which may include volunteering or community contribution

Access to public funds may also be restricted until a migrant becomes a British citizen, not simply settled.

What This Means for Employers

For employers who rely on international talent, especially those sponsoring workers these proposals have several implications:

• Migrants may need to be sponsored longer before becoming permanently settled, increasing costs.
• Retention planning becomes more complex.
• High earners may reach ILR sooner than lower-paid roles, so employers will need a system to track each worker’s route, timeline and required actions. 
• Recruitment and workforce planning for key roles will require a longer-term immigration strategy.

Action for Employers: Communicate Clearly and Calmly With Your Workforce

With headlines focusing on extended periods to obtain ILR, many sponsored workers will understandably be worried. Employers should take a proactive, steady approach to internal communications:

• Reassure staff that nothing has changed yet. These are proposals only, no new settlement rules are in force.
• Highlight that transitional arrangements are expected. The consultation is may introduce protections for people already part-way through a route to ILR.
• Avoid making assumptions. Despite the headlines, not all elements of the announcement may be implemented, and the detail could change during consultation.
• Provide structured opportunities for questions. Consider holding a town hall, Q&A session or workshop with a qualified immigration specialist so employees can get clear, accurate answers.
• Keep communication consistent and transparent. Regular updates will reduce speculation and prevent unnecessary anxiety.

This period is about stability, reassurance and clarity, not panic. Employers who communicate early and openly will maintain trust and avoid confusion while the policy develops.

What Individuals Should Be Thinking About

If you’re already in the UK on a visa, or planning to apply, it’s important to be aware of the proposals, but equally important not to panic.

• Nothing has changed yet. These are proposals only. No new settlement rules are currently in force.
• Timelines you were expecting may change, depending on how the consultation develops.
• Transitional arrangements are expected, and may protect people already part-way through a route to ILR.
• The details could change significantly before anything is implemented, both the durations and the criteria.
• Your current route remains valid. You should continue working, studying or progressing toward your planned application as normal.
• Planning ahead is sensible, but avoid making major decisions until the final policy is known.
• If you’re unsure, get tailored advice. This is not a situation where one-size-fits-all answers apply.

In short: stay informed, but don’t assume today’s announcement reflects what the final rules will look like. There is a consultation period ahead and considerable scope for change.

Final Thoughts

This announcement marks a significant change in how the UK intends to approach long-term residence, but it is important to remember that nothing has changed yet. These are proposals, not confirmed rules, and the consultation period means the final framework could look very different.

Timelines, categories, and criteria may change substantially during that process. Transitional arrangements are also expected, which may safeguard many people already partway through their journey to ILR. For both employers and individuals, now is the time for clarity, not panic.

For employers, the focus should be on communication, reassurance and preparing to adapt internal systems once the final rules are confirmed. For individuals, it’s about staying informed, continuing with your current route as planned, and avoiding any rushed decisions until the policy is settled.

Immtell will continue to track developments closely and provide clear updates as the consultation progresses, including what the final rules will mean in practice for businesses, sponsored workers and families.

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Read the full Home Office announcement HERE