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.

Need help?

If you have any queries about the proposals and how they may affect you or your business, or if you need assistance with drafting a response to the consultation or inquiry, please contact a member of our immigration team.

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