The UK Government has recently announced a significant overhaul of the Indefinite Leave to Remain (ILR) system. The central proposal is to extend the standard qualifying period for ILR from five to ten years. This change forms part of a new “Earned Settlement” model, which would shift the focus from granting settlement purely on the basis of lawful residence to rewarding those who make sustained economic or societal contributions to the UK.

At this stage, the Government has not clarified when these changes will come into effect, whether they will be applied retrospectively to those already on the five-year route, or whether any transitional (grandfathering) provisions will be implemented. This lack of detail leaves both employers and visa holders facing considerable legal and practical uncertainty.

Below, we provide a detailed overview of the anticipated changes, their potential impact, and the strategic steps businesses and individuals should consider in preparation.

Current Position and Proposed Changes

Under the current system, Skilled Worker visa holders are eligible to apply for ILR after five years of continuous lawful residence. ILR brings significant benefits, including exemption from sponsorship requirements and eligibility for British citizenship.

Should the proposed changes be implemented, migrants would need to remain on temporary visas for a full decade before qualifying for settlement. This would result in more frequent visa renewals and a corresponding increase in costs, including application fees, the Immigration Health Surcharge, and legal or administrative expenses. Employers would face a prolonged period of sponsorship obligations and a greater risk of losing valued staff during the extended qualifying period.

Of particular concern is the lack of clarity regarding whether the new rules would apply to those already on the five-year route to settlement, or only to new entrants. The absence of guidance on transitional arrangements creates significant legal uncertainty for both migrants and their sponsoring employers.

Practical Implications for Employers and Migrants

For employers, these changes could complicate workforce planning and increase both the administrative and financial burdens of sponsoring international staff. Existing models based on a five-year trajectory would need to be revisited, especially for roles requiring long-term retention or specialist skills.

Furthermore, as announced by the Home Secretary on 12 May 2025, the Immigration Skills Charge will increase by 32%. This charge must be borne by the employer and cannot be passed on to the employee.

From the perspective of international professionals, the prospect of waiting ten years to secure permanent residence may make the UK a less attractive destination. This could be particularly disruptive in sectors such as financial services, life sciences, technology, and engineering, where access to global talent is vital for business continuity and growth.

Ongoing Uncertainty: Implementation and Transitional Provisions

At present, the Government has confirmed that further consultation will take place before any changes are implemented. However, there is still no confirmation regarding:

• When the ten-year qualifying period will come into force;
• Whether the changes will apply retrospectively to those already in the UK;
• What, if any, transitional arrangements will be introduced for those currently on the five-year pathway.

This uncertainty makes it challenging for HR and legal teams to advise on immigration timelines and long-term planning, and increases the risk of miscommunication with sponsored employees who may be relying on the existing five-year settlement route.

Strategic Considerations for Employers and Visa Holders

In light of these developments, we recommend that businesses take proactive steps to prepare for potential changes:

• Internal Review: Assess your current sponsorship arrangements to identify employees who may be affected by the new rules.
• Cost Forecasting: Project visa-related costs over a longer period, particularly for roles that traditionally attract international applicants.
• Prioritise ILR Applications: Where employees are already eligible or close to being eligible for ILR under the current five-year rule, it may be prudent to prioritise their settlement applications before any changes come into effect. However, given the lack of clarity regarding implementation dates and transitional provisions, we strongly advise seeking expert legal guidance.
• Explore Alternative Visa Routes: Consider whether alternative immigration routes, such as the Global Talent visa, Innovator Founder visa, or family visas for dependants of British citizens, may offer a faster or more secure pathway to settlement.

The proposed extension of the ILR qualifying period represents a fundamental shift in UK immigration policy. While the Government’s stated aim is to restore control and fairness to the system, these changes may have significant unintended consequences for employers, international mobility, and the UK’s ability to compete for global talent.

With so much still uncertain, it is essential for businesses and individuals to monitor developments closely and seek specialist legal advice to minimise disruption and safeguard their interests.

ARIS International Lawyers will continue to monitor all developments and provide updates as further details emerge. If you require tailored legal advice regarding how these proposed changes may affect your business or employees, please contact us on 020 3865 6219 or via email to arrange a consultation.