Companies could soon find the UK a more costly and less appealing destination for international talent as the government prepares sweeping reforms to immigration settlement rules. Home Secretary Shabana Mahmood has launched a consultation on new requirements for people seeking indefinite leave to remain or arriving in the UK under skilled worker sponsorship. The changes, which form part of Labour’s wider push to reshape immigration policy, could reshape how employers attract and retain overseas workers.
Under the new proposals, migrants could face a settlement wait of up to 10 years instead of five. Only individuals deemed to have made an “outsized contribution” to national life — through exceptional talent, high tax contributions, or voluntary service — may qualify for a shorter pathway.
Crucially, all temporary visa holders would be affected, even if they are already close to securing settlement. The shift is designed to tighten long-term immigration routes, but experts warn it risks destabilising those already integrated into the UK workforce.
Experts Warn of Smaller Talent Pools and Higher Sponsorship Costs
Shara Pledger, immigration specialist at Pinsent Masons, says the overhaul represents a significant challenge for businesses relying on global recruitment. She warns the system may become less attractive to highly skilled applicants and could shrink the available talent pool for UK companies. Longer sponsorship periods would also force employers to make repeated and costly visa applications on behalf of staff. For migrant workers already in the UK, uncertainty around extended settlement waits may cause anxiety and reduce confidence in long-term prospects.
Higher Earners Retain Five-Year Track While Lower-Paid Workers Face Delays
Under the proposed framework, skilled workers earning £50,270 or more would keep the current five-year route to settlement, unless barred by significant issues such as criminal convictions or immigration breaches. Workers earning below that salary threshold would see their route extended to 10 years, although this could be reduced by completing higher-level English qualifications or voluntary service. Dependants would not automatically benefit from any accelerated settlement secured by the main applicant, creating the possibility of families with mismatched settlement timelines.
Which Groups Are Exempt From the Longer Route?
The government plans to retain shorter settlement routes for certain categories, including spouses and dependants of British citizens and those coming under the British Nationals Overseas scheme. Settled status granted under the EU Settlement Scheme remains outside the scope of the review and will not be altered. The consultation is open until 12 February 2026, with implementation expected later in the year. Pledger advises companies to use this window to prepare formal responses on how the reforms could affect their workforce and operations.
Part of Broader Immigration Tightening Under Labour
These proposals follow the government’s earlier decisions to restrict student visa rules and reduce dependent numbers for international students — moves aimed at cutting overall migration figures amid mounting political and media scrutiny. Labour has faced sustained pressure to deliver visible reductions in immigration, and the settlement overhaul represents one of the most significant long-term policy shifts under consideration. Businesses, academic institutions and international workers are now bracing for another major reshaping of the UK’s migration landscape.
