
The Government’s proposed overhaul of UK settlement rules could have significant consequences for the construction industry, which relies heavily on migrant labour to fill skills shortages.
The proposed earned settlement system would replace the current model under which many migrants can apply for indefinite leave to remain (ILR) after five years. Instead, the Government wants settlement to become something that migrants must effectively earn through their contribution to the UK economy and society.
The consultation on the proposals closed in February 2026 after receiving more than 200,000 responses. However, the Government has yet to publish its final response. In July, Immigration Minister Mike Tapp confirmed that a substantive response would be provided alongside the consultation outcome in autumn 2026.
What is earned settlement?
Settlement, also known as ILR, gives a person the right to live and work permanently in the UK without the restrictions attached to most temporary immigration routes.
Under current rules, many Skilled Worker visa holders can apply for ILR after five years, provided they meet the relevant requirements. Once settled, they are no longer dependent on an employer for immigration sponsorship.
The Government’s proposed earned settlement model is based on the principle that permanent residence should reflect an individual’s contribution and integration rather than simply the passage of time.
The Home Office says settlement should recognise “sustained good conduct, contribution and integration”, with applicants assessed against four broad pillars: contribution, integration, character and residence.
The central proposal is to increase the standard qualifying period from five to 10 years, with the possibility of reducing or extending that period according to an individual’s circumstances.
How would the new system work?
The consultation proposed a 10-year starting point, with a series of adjustments.
For example, achieving C1-level English could reduce the qualifying period by one year. Earning taxable income of at least £50,270 for three consecutive years could reduce it by five years, while earning £125,140 or more for three years could provide a seven-year reduction.
Five years of employment in a specified public-service occupation could also produce a five-year reduction, while significant community involvement, such as volunteering, could potentially reduce the period by three to five years. Global Talent and Innovator Founder applicants could potentially benefit from a seven-year reduction.
The proposals also contain penalties. Receiving public funds for less than 12 months could add five years to the qualifying period, while receiving them for more than 12 months could add 10 years. Illegal entry, entering on a visit visa or overstaying for six months or more could add up to 20 years.
The Government has also proposed removing the existing 10-year long-residence route, replacing it with the new system of adjustable qualifying periods.
One particularly controversial element is the suggestion that some lower-skilled workers could face a 15-year baseline. This matters considerably to construction because a number of trades have historically relied on overseas recruitment.
Why construction could be particularly exposed
Construction already faces persistent shortages in skilled workers, while the industry has a substantial migrant workforce. Research cited by PBC Today puts the proportion of construction workers born outside the UK at around 16%.
The Government’s own immigration rules also demonstrate the importance of overseas recruitment to some construction trades. Bricklayers, roofers, carpenters and joiners, and certain construction trades are currently included on the Immigration Salary List, allowing qualifying workers to access reduced salary and skills thresholds.
That creates a potential mismatch between immigration policy and the industry’s labour requirements.
A worker may be sufficiently skilled and sufficiently valuable for a construction business to sponsor them, but still earn below the proposed £50,270 threshold needed for the five-year settlement reduction. Such a worker could therefore face the full 10-year qualifying period, or potentially longer if the final rules retain differentiated treatment for lower-skilled occupations.
This is particularly important for trades where salaries do not necessarily reflect their economic importance. A highly experienced bricklayer, carpenter or roofer may be difficult to replace but is unlikely to earn anything close to £125,140 a year.
The House of Commons Home Affairs Committee has already questioned the logic behind the proposed earnings thresholds. Dr Madeleine Sumption of the Migration Observatory described the use of tax thresholds as “a little arbitrary”, while former Migration Advisory Committee chair Professor Alan Manning warned that the £50,270 threshold could even create an incentive for employers to suppress migrant workers’ wages to delay their settlement.
That is a significant concern for construction employers because the ability to retain experienced workers is already an important part of managing skills shortages.
Sponsorship costs could increase
For construction businesses, the practical impact would extend beyond immigration status.
A worker who takes twice as long to achieve settlement could remain sponsored for twice as long. That means additional visa applications, immigration administration, compliance responsibilities and associated costs.
Joanne Hennessy, partner and head of business immigration at TLT, warned that employers who previously expected to face “at most five years of cost and compliance” could potentially see that period double. She also highlighted the risk that longer settlement routes could make it harder for construction companies to attract and retain international workers.
There is also a retention issue. Once an employee obtains ILR, they have considerably greater freedom to change employer. Keeping someone on a sponsored visa for longer may therefore give employers greater control, but it can also make the UK less attractive to workers considering where to build a long-term career.
That could become particularly problematic when construction companies are competing internationally for experienced engineers, project managers and specialist tradespeople.
A potential incentive to pay more
There is, however, another side to the proposals.
Linking settlement to earnings could encourage employers and employees to invest in progression, training and higher-skilled roles. A worker who moves into a more senior position and crosses the relevant earnings threshold could potentially shorten their route to settlement.
For construction, that could support career progression from skilled trades into supervisory, managerial and technical roles.
But it also risks creating a two-tier workforce in which the workers most essential to delivering projects are not necessarily those who benefit most from the settlement system.
The Parliamentary Home Affairs Committee has warned that the proposed earnings reductions could be poorly targeted. It noted that the median income of Skilled Workers, excluding Health and Care workers, was £56,600 in 2023/24, meaning many would potentially qualify for the five-year reduction, but questioned why someone making a positive fiscal contribution while earning below £50,270 should face the full 10-year route.
What happens next?
The most important point for construction employers is that earned settlement is not yet law. The existing settlement rules remain in force while the Government considers the consultation responses.
The Government has indicated that the final consultation response is expected in autumn 2026. It is also considering whether transitional arrangements should protect people already in the UK who are working towards settlement.
That transitional issue could be critical. Applying substantially longer settlement periods retrospectively to workers who came to Britain expecting to qualify under the existing five-year system has attracted strong criticism. The House of Lords Justice and Home Affairs Committee described retrospective changes as potentially “manifestly unfair” and recommended against applying them to people already on a qualifying route.
For construction businesses, the sensible approach is therefore to treat earned settlement as a significant potential workforce-planning issue rather than a settled immigration rule.
The industry needs clarity on whether existing workers will be protected, how lower-paid but strategically important occupations will be treated, and whether the final system will recognise contribution in terms broader than salary alone.
For a sector already struggling to recruit and retain enough skilled people to meet housing, infrastructure and net-zero ambitions, making the route to permanent residence longer and less predictable could carry a substantial cost. Unless the final rules are carefully designed around genuine skills shortages, there is a risk that earned settlement could make the UK less competitive in the global market for construction talent at precisely the time the industry needs more workers, not fewer.
















