The House of Lords Justice and Home Affairs Committee have published a report on the proposed reforms to settlement and citizenship, contributing to the ongoing conversation regarding these controversial proposals.
On 23 June 2026, the House of Lords Justice and Home Affairs Committee published its report on the UK Government’s proposed reforms to settlement and citizenship. The report provides a detailed assessment of the Government’s plans to introduce an “earned settlement” system, applying changes retrospectively to those already in the UK.
While acknowledging the need for reform, the Committee disagreed with a number of the Government’s key proposals and offers alternative recommendations. The Government is required to respond within two months.
What are the current rules?
Under the existing immigration rules, most migrants on qualifying visa routes, including the Skilled Worker and family routes, can apply for Indefinite Leave to Remain in the UK (ILR) after five years of continuous residence in the UK on their visa. Dependants of the main applicant qualify for ILR on the same timeline. A separate “Long Residence” route also allows settlement after ten years of lawful residence on a combination of visas.
To qualify for ILR, applicants must currently pass the Life in the UK test and meet English language requirements (currently at B1, rising to B2 from March 2027). Refugees are granted ILR after five years without needing to meet employment or income conditions.
Once granted ILR, individuals acquire the right of permanent residence in the UK, meaning they no longer need to renew their immigration status. They also gain access to public funds and are no longer required to pay the Immigration Health Surcharge.
The Government’s proposals
In November 2025, the Home Office published its “A Fairer Pathway to Settlement” consultation paper, proposing the following significant changes to the rules on ILR:
Extended qualifying periods: The baseline time to qualify for ILR would increase from five years to ten years for most routes, and potentially to fifteen years for Skilled Workers in roles below degree level (RQF 6), and to twenty years for refugees on the core protection route.
Earned settlement model: Qualifying periods could be extended or reduced depending on specific criteria. For example, earning over £50,270 per annum for three years would earn a five-year reduction, while accessing public funds would add five to ten years. The maximum reduction consulted on is seven years, for earning over £125,140 per annum; the maximum extension adds a further twenty years for applicants who entered the UK illegally or on a visit visa.
Mandatory minimum requirements: To qualify for settlement, applicants must demonstrate English at CEFR B2 level and have had an income of at least £12,570 for three to five years.
Dependants qualify independently: Family members would no longer be eligible for ILR at the same time as the main applicant but would need to meet ILR requirements on their own timescales.
Retrospective application: The new rules would apply to all individuals currently on a route to settlement who have not yet been granted ILR.
Abolition of the Long Residence route: The existing ten-year long residence route to settlement would be removed.
Key recommendations of the House of Lords Committee
The Committee’s recommendations differ from the Government’s proposals in several important respects:
Retain the five-year qualifying period: The Committee does not support extending the standard route to ILR to ten years or beyond. It considered that longer timelines would undermine integration, increase insecurity of status, and raise risks of poverty and irregular status. As an alternative, the Committee proposes retaining the five-year route but separating ILR from access to public funds, with No Recourse to Public Funds continuing until either ten years’ residence or citizenship is attained.
No retrospective application: The Committee strongly recommended that any new rules should not apply to individuals already on a route to settlement. It considered retrospective changes to be “manifestly unfair” and potentially unlawful, noting that migrants have made significant life decisions, including career moves, housing purchases and family planning based on the existing rules.
Income thresholds and contribution criteria: The Committee recommended that:
- Thresholds should be set based on Migration Advisory Committee (MAC) advice rather than aligned solely to income tax bands.
- Broader contributions beyond individual income should be recognised.
- Dependants should be able to qualify for ILR alongside the main applicant where the household is financially self-sufficient.
- Exemptions should apply for vulnerable individuals, those on maternity leave, unpaid carers, and those with long-term illness or disability.
Children and settlement: Children who arrive at a young age and grow up in the UK should generally receive settled status by age 18, and clear settlement pathways should exist for those arriving at an older age.
English language provision: The Committee emphasised that language is critical to integration and recommends a national ESOL (English for Speakers of Other Languages) strategy with increased provision to meet demand.
Immigration fees: The Committee recommends capping immigration fees at 150% of processing costs. Fees are currently set at approximately 212% of costs, which the Committee considered to be a burden on lower earners who face repeated applications.
Data gaps: The Committee identified significant gaps across the immigration data landscape, including uncertainty over who is in the UK and migrant outcomes after arrival. It recommends urgent publication of exit check data (not published since 2020), improved cross-government data sharing, and the development of linked administrative data systems.
Home Office capacity: The Committee called for an independent review of Home Office operations, including staffing structures, processes, and technology. It expressed concern that the department lacks the capacity to manage the current system, let alone the increased complexity of the proposed reforms.
Integration as a two-way process: The committee placed strong emphasis on employment as a key driver of integration and calls for reinstatement of refugee employment programmes. It also highlights that the proposed changes may disproportionately impact lower earners, women, and refugees.
Impact on Employers
The report signals material policy concerns that employers should be aware of, particularly around:
- Extended settlement timelines increasing the duration and cost of sponsorship obligations.
- Retrospective application creating uncertainty for existing sponsored workers and their dependants.
- Impact on talent attraction and retention, with witnesses noting that the proposals could make the UK a less attractive destination for highly skilled migrants compared to competitor countries (such as Canada, Australia, and New Zealand).
- Increased costs for both employers and employees if settlement timelines are extended, including ongoing Immigration Skills Charge payments, visa renewal fees, and the Immigration Health Surcharge.
- Workforce planning difficulties arising from prolonged insecurity of status for key employees.
Employers should note:
- The proposals remain subject to change, further to the Government’s response to both this report and its own consultation.
- Retrospective changes remain a key risk area, but the Committee’s strong opposition may influence the Government’s final position.
- The Government is expected to respond within two months, with further policy developments and potential legislation through the Immigration and Asylum Bill anticipated later in 2026.
Looking Ahead
The Committee’s report represents a significant intervention in the debate on settlement and citizenship reform. While the Government remains committed to restructuring the settlement framework, the Committee’s firm opposition to extended qualifying periods, retrospective application, and rigid income-based criteria introduces meaningful political and legal pressure to moderate the proposals. In particular, its emphasis on fairness, integration, and administrative capacity highlights the risks of pursuing reform at speed without adequate safeguards.
With the Government’s formal response due within two months and further proposals expected through the Immigration and Asylum Bill later in 2026, the ultimate direction of reform remains uncertain. Employers and individuals should therefore approach long-term immigration planning with caution, particularly where settlement timelines, dependant eligibility, and sponsorship costs are concerned.
We will continue to monitor developments closely. In the meantime, employers and migrants may wish to review their current sponsorship and settlement strategies to identify potential exposure to future reform and ensure they are well-positioned to respond as policy clarity emerges.
If you have any questions about how these proposed changes may affect your organisation or your personal immigration position, please do not hesitate to contact our immigration team at immigration@fsp-law.com
