Changes to Indefinite Leave to Remain for sponsored employees – what employers need to know

Many employers will have been contacted by sponsored employees who are concerned about the government’s proposals, set out in the May 2025 white paper entitled “Restoring control over the immigration system”, to increase the standard qualifying period for settlement in the UK (or “Indefinite Leave to Remain”) under the points-based system from 5 years to 10 years. 

Currently, employees who are sponsored under a ‘qualifying route’ within the points-based system (such as the Skilled Worker route) are usually eligible for settlement after having spent 5 continuous years in the UK. Whilst settlement is subject to the Immigration Rules at the time of applying (which, as we know, can change), many individuals and their employers naturally make plans around this anticipated timescale. For example:

• employees may plan for a long-term family life in the UK and may bring dependants who will also obtain jobs or school and university places;
• settlement also brings significant benefits, such as the ability to claim state benefits and use the NHS without payment. Settled individuals can also apply for student finance (which will often be relevant for the dependent children of sponsored employees approaching university age); and
• the length of qualifying period for settlement affects the potential cost of sponsorship for both employers and employees. Currently, employers must pay various fees when they sponsor a worker, the largest of which is the Immigration Skills Charge which can cost £1,000 per year of sponsorship depending on the employer's size. Many employers also reimburse visa application fees paid by the employee, which vary depending on the length of the visa. Currently, individuals can be sponsored for up to 5 years at a time. If the qualification period for settlement rises to 10 years, this may mean that employers face a doubling of the Immigration Skills Charge payable in order for an employee to qualify for settlement and the employee will need to make at least one additional visa application, the cost of which may be reimbursed to them, depending on the employer’s policy. The additional duties for an employer that come with sponsoring an employee (such as reporting and record-keeping duties) will also be in place for a longer period and until the employee is no longer sponsored. 

As part of its intention to increase the standard qualifying period for settlement, the government indicated in its white paper that individuals could have an opportunity to benefit from a reduced qualifying period based on “points-based contributions to the UK economy and society”. This may remind some of the proposals for “earned citizenship” which were put forward by the last Labour government in 2007, but which were not implemented before the 2010 general election.

On 29 September 2025, the Home Office published an update on its contribution-based settlement proposals. Under these proposals, individuals would be able to earn a reduction in the qualifying period for settlement if they meet “earnings and integration requirements”, including “being in work, making a certain level of National Insurance contributions, not taking any benefits payments, learning English to a high standard, having a spotless criminal record, and giving back by, for example, working in your local community.” Interestingly, the Home Secretary has also stated that individuals who are ‘non-compliant’ (which is not defined but could potentially include, for example, claiming benefits or being out of work for a certain length of time) may face an extended qualification period or could have their applications refused outright. The Home Office has confirmed that the proposals will be subject to a public consultation, which will be launched before the end of the year. 

One key question that remains unanswered, and which has proved contentious, is whether the proposed increase to the qualifying period will be retrospective or will only apply for those starting out on a route to settlement under a qualifying visa. Recent changes to the Immigration Rules, such as the significant increases to the salary and skill level requirements for Skilled Workers, have included transitional arrangements for existing visa holders, limiting the impact of the changes for those already on the route. However, it is not clear whether this pattern will continue and the Minister of State for Border Security and Asylum, Alex Norris, indicated at the start of September 2025 that this point would also be subject to consultation.

Employers will need to wait to see how these proposals play out. More concrete details should be available when the consultation is published later this year. However, they may wish to encourage employees who are (or will soon be) eligible for settlement to do so as soon as possible. 

Please keep an eye on our website or join our mailing list for further updates as additional details of the proposals emerge.