What the UK’s new “Contribution-Based Immigration System” means for workers and employers

Learn how the new contribution-based immigration system will affect workers, employers and settlement routes following the latest Home Office announcement.

On 20 November 2025, the Home Office released ‘A Fairer Pathway to Settlement” – a statement and accompanying consultation on proposals to reform the current settlement rules in favour of an “earned settlement” model. The paper proposes to increase the standard qualifying period for settlement from the usual five years to ten years for most applicants (15 years for most health and care workers), with this baseline reduced or extended depending on individual circumstances. When applying for settlement, applicants will be assessed on:

• Character
• Integration
• Contribution
• Residence

These proposed reforms mark a major shift for Skilled Workers and, by extension, their employers. Currently, Skilled Workers are eligible for settlement after residing in the UK for five years on a Skilled Worker visa. If the proposed changes are implemented, employers seeking to hire talent from overseas will be required to fund more visa applications before their employees reach settlement. This will create a significant additional financial burden, as the employer must cover visa fees, the Certificate of Sponsorship allocation fee, the Immigration Skills Charge and the Immigration Health Surcharge fee – all of which have increased (or are set to increase) this year.

This follows the recent tightening of Skilled Worker rules, including the increase of the minimum RQF threshold to level 6, an increase to the minimum salary threshold to £41,700, and a rise in the minimum English language requirement to B2 (effective 8 January 2026).

The paper proposes that those who make a sustained and measurable contribution to the UK should receive reductions to their qualifying baseline under the ‘Contribution’ pillar. Specifically, the paper suggests:

• A seven-year reduction to the baseline qualifying period for those who have earned a taxable income of £125,140 for three years immediately prior to applying for settlement;
• A five-year reduction to the baseline qualifying period for those who have earned a taxable income of £50,270 for three years immediately prior to applying for settlement.
• A five-year reduction is also applied to those who have been employed in a specified public service occupation for five years (for roles at RQF 6 and above).

Under the ‘Integration’ pillar, applicants with English language competency at level C1 level will be granted a one-year reduction to their qualifying baseline.

By contrast, the paper proposes increasing the qualifying period to settlement for those deemed to be taking more out of the economy than they contribute. It states that workers in low-wage and lower-skilled roles are less likely to make a net fiscal contribution over the long-term, and therefore proposes setting the baseline qualifying period for sub-RQF6 workers to 15 years.

These proposed changes are yet to be implemented, and the consultation survey remains open until 12 February 2026. However, if adopted, these reforms are likely to have far-reaching impacts on both the willingness of Skilled Workers to come to the UK for work, and employers’ desire to sponsor them – particularly at a time when the UK is experiencing skills shortages in a number of key areas critical to the Government’s growth strategy.

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The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

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