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The Government proposes to introduce a new ‘earned
settlement’ model without any transitional arrangements. In
this article we outline the potential impacts on businesses and
individuals. We also comment on the legal context for transitional
arrangements and provide some guidance on how to express views in
the consultation and more broadly.
The Home Office is currently consulting on proposals to
introduce an ‘earned settlement’ model. The consultation period is due to end at 23:59 GMT
on 12 February 2026 and new Immigration Rules implementing earned
citizenship could be introduced as early as April 2026.
For general information on the proposals and the main public
consultation, see our separate article here.
What are some of the potential effects on businesses if there
are no transitional arrangements?
The effects will be different for each business, but some
general and non-exhaustive potential effects are:
Additional visa extension costs (approximately £14,000
for a five year extension for a single applicant sponsored by a
medium/large sponsor, or approximately £10,000 for a person
sponsored by a small/charitable sponsor), or potential termination
of employment for any sponsored workers who are not eligible to
settle after five years under the earned settlement proposals;
Loss of any staff member who decides to leave the UK, or who
changes jobs in the hope of qualifying for settlement earlier;
Loss of any staff member who is ineligible to meet settlement
or extension requirements due to revised character requirements
(e.g. the requirement to have a clean criminal record for
settlement, and potentially also for extension);
Recruitment and training costs in relation to any staff members
lost;
A need to analyse the remuneration of sponsored workers (and
potentially other staff with limited immigration permission), with
a view to understanding their aspirations and how their
remuneration might be structured to meet the new (and more complex
to calculate) taxable earnings requirements;
A need to consider requests from existing staff for time off to
‘give back to the local community’; and
Additional difficulties in recruiting suitable candidates for
open roles, especially if international talent is concerned the
Rules for settlement may be changed further after they arrive in
the UK, with no transitional arrangements.
What are some of the potential effects of having no
transitional arrangements on individuals?
The specific effects will vary widely depending on the personal
circumstances of each individual, however some potential effects
include:
That some individuals will not become aware of the changed
requirements until they come to apply for settlement and realise
they are no longer eligible;
Being subject to significant unplanned costs for visa
extensions – the magnitude of which may be greater for:
Those who are Skilled Workers in roles skilled below degree
level (if this group is subject to a 15-year baseline qualifying
period)
Those with dependants; and
Those who are subject to an increase to the baseline qualifying
period for settlement;
Being subject to the immigration conditions of limited
immigration permission for a longer period than originally planned
for, which may limit work and entrepreneurial opportunities;
Main applicants and dependants needing to consider
substantially rearranging their work and other personal
circumstances, including:
Whether to take supplementary employment;
Whether to change to more highly skilled and/or highly-paid
job;
Whether to restructure remuneration to reduce or eliminate use
of salary sacrifice schemes (including pension);
Whether to work in addition to carrying out caring or other
personal responsibilities;
Whether and how to carry out community activities;
Making arrangements to meet English language requirements at
upper intermediate level (level B2 on the Common European Framework
of Reference for Languages), or potentially advanced level (level
C1) if no other baseline qualifying period reduction factor is
relevant;
Whether and where to undertake tertiary education due to
potential additional cost to do this in the UK before settling;
and
Whether to relocate to an alternative country;
Potential for retired individuals, those with caring
responsibilities, those with disabilities and young adults in
education to be ineligible for settlement (either temporarily or
permanently);
Potential for those with historic criminal convictions that are
below the current thresholds for refusal to be refused extensions
and/or settlement in the future; and
Potentially being issued with settlement that includes a
prohibition on accessing public funds.
Does the law require transitional arrangements to be applied
for people who are already on a path to settlement?
This is not straightforward, because the protections against the
retrospective application of new laws are not absolute.
The presumption against retrospectivity
Under UK common law, there is a presumption that when a law is
changed, it will not have retrospective effect, i.e. a new law
won’t change the legal rights of those who have acted in
accordance with the law as it stood before the change. However,
this presumption can be displaced by a clear statement from the
lawmaker that the law is intended to apply retrospectively.
Legitimate expectation
In some cases, a person may be able to argue that they have a
legitimate expectation not to be affected by a retrospective
change. The law in this area is still evolving, however in the
context of the proposed earned settlement changes, the following
issues are likely to be at play:
Procedural legitimate expectations can be met by providing
people who may be affected by the change the opportunity to be
consulted and make representations before the change is made
– this is what the Government aims to do through the earned
settlement consultation, however, there are concerns about whether
the scope of the consultation and format for responses are
sufficient to enable representations to be effectively made;
The Home Office has made retrospective changes to settlement
criteria in the past, e.g. on 3 April 2006 when the qualifying
period for settlement in many routes was revised from 4 years to 5
– only participants in the Highly Skilled Migrant Programme
were successful in using a legitimate expectation
argument to challenge this, due to that scheme containing clear
statements that once a person had joined it, they would enjoy the
full benefits of the scheme as it stood at that date (including
being able to settle after 4 years);
Since the HSMP Forum judgment, the Government has taken greater
care not to represent routes to settlement as being a
‘scheme’ that includes an entitlement to settle after a
certain period; and
Even if a legitimate expectation can be demonstrated, this can
be overridden by public interest considerations.
What does the public consultation document on earned settlement
say about transitional arrangements?
The government’s preferred approach is for there to be no
transitional arrangements applied when earned settlement is
implemented. The consultation document states on page 4
that:
“…we propose to apply these changes to everyone in
the country today who has not already received indefinite leave to
remain. This would mean that those who are due to reach settlement
in the coming months and years would be subject to the new
requirements for earned settlement, as soon as our immigration
rules have changed.”
On page 27 the document states:
“Transitional Arrangements
This consultation includes questions intended to seek
respondents’ views on how far the implementation of the earned
settlement model should be accompanied by transitional measures.
Transitional arrangements refer to temporary measures or rules put
in place to manage the shift from one system, or policy framework,
to another. Without any transitional arrangements, the earned
settlement policy will affect people already in the system, who are
not already settled when relevant Immigration Rules come into
force.
Transitional arrangements may be designed to ease the impact
of policy change, especially for individuals or groups already
afforded permissions by the previous system. The consultation seeks
views on whether there should be transitional arrangements for
those already on a pathway to settlement.”
Note that any transitional arrangements implemented by the
Government following consultation may be applied broadly, i.e. to
all persons in the UK on a path to settlement, or in specific,
targeted instances, e.g. to vulnerable groups, or individuals on a
specific settlement route.
How can I respond to the consultation questions on transitional
arrangements?
There is a specific multiple-choice question on transitional
arrangements – Eligibility and Equalities Question 3:
“To what extent do you agree or disagree that there
should not be transitional arrangements for those already on a
pathway to settlement?
Transitional arrangements refer to temporary measures which
are designed to ease the impact of the new rules for those already
in the UK and on an existing pathway to settlement.
Strongly agree
Agree
Neither agree nor disagree
Disagree
Strongly disagree
Don’t know / prefer not to say
Note that the question is worded from the point of view of the
Government’s preferred position, so respondents who are in
favour of transitional arrangements should select either
‘Disagree’ or ‘Strongly disagree’.
The purpose of Eligibility and Equalities Question 12 is unclear
as it appears to have been drafted in a rush. However, it is a free
text question that offers an opportunity to comment further on
transitional arrangements (with a 200-word restriction). The
question states:
“Do you have any further comments on how
specific should be considered in relation to settlement? We
particularly welcome views on how the prosed changes could affect
children in the UK.”
Lastly, the consultation includes a series of questions focusing
on the possible impact of the proposals on organisations. When
answering these questions, we would suggest that organisations
should assume that there will be no transitional arrangements, as
this is the Government’s preferred position.
How else can I express my views on transitional
arrangements?
In addition to the main public consultation launched by the Home
Office, both Houses of Parliament are seeking views on earned
settlement. For further information, see our separate article here.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.