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      The Home Secretary released additional details regarding the proposed contribution-based settlement model for Indefinite Leave to Remain (ILR) in the U.K. The announcement outlines a new framework intended to extend the qualifying period for settlement and introduce contribution and integration requirements for applicants.1

      WHY THIS MATTERS

      The proposed changes to ILR eligibility could have significant implications for global mobility programmes, mobile employees, employers, and HR leaders. Extending the minimum residence period from five to ten years may increase the cost and complexity of long-term assignments and expatriate workforce planning.

      The new system's emphasis on economic and social contributions—such as employment, National Insurance contributions, integration measures, and community involvement—adds further compliance requirements. Migrant workers may face stricter scrutiny on their work history, benefit claims, English proficiency, and conduct, potentially affecting their ability to settle and access public services.

      Key Highlights

      The Home Secretary provided further detail on the government's intention to reform the ILR process, focusing on contribution and integration. The proposals are subject to a consultation due to be launched by the end of the year.

      Extended Minimum Residence

      A proposed change to the qualifying period for ILR from five to ten years of lawful residence in the UK.

      Contribution-Based Reductions

      Applicants may reduce the required residence period by meeting specified earnings, integration, and contribution criteria.

      Stricter Compliance

      Non-compliance with UK laws or regulations may result in extended waiting periods, or outright refusal of settlement.

      Consultation and Inquiry

      • The plans will be subject to a consultation due to be launched by the end of the year to gather input from stakeholders.

      • A separate parliamentary inquiry by the Home Affairs Committee is underway, seeking evidence on the impact of these proposals on businesses, migrant households, and integration. Submissions are open until 2 December 2025.2

      KPMG LLP (U.K.) INSIGHTS

      Steps to Consider

      In light of the upcoming changes, organisations may wish to consider the following:

      • Stakeholders should monitor developments and consider whether they wish to engage with the upcoming consultation and parliamentary inquiry. Organizations may also wish to participate in the consultation and inquiry to share operational insights and sector-specific concerns.

      • Employers may wish to review existing support programs to help employees meet any new integration and contribution benchmarks for ILR, including language training and community engagement initiatives.

      • These proposals remain subject to public consultation and parliamentary scrutiny. Final details and implementation timelines will depend on the outcome of these processes. 
      FOOTNOTES:

      1  See GOV.UK website, “New contribution-based settlement model to reduce net migration,” updated on 29 September 2025.

      2  See UK Parliament website, “New inquiry: Routes to Settlement,” published on 21 October 2025.

      Contacts

      Kelly Whiter
      Kelly Whiter

      Partner

      KPMG in the UK

      Alina Fosh
      Alina Fosh

      Senior Manager

      KPMG in the UK

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      * Please note the KPMG International member firm in the United States does not provide immigration or labour law services. However, KPMG Law LLP in Canada can assist clients with U.S. immigration matters.

      The information contained in this newsletter was submitted by the KPMG International member firm in the United Kingdom.

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