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On 11 December 2025, the Migration Advisory Committee published its Immigration Fiscal Impact report.
The MAC does not set immigration law. Its reports provide the evidence base for government policy, which the UK government has historically followed in most cases.
The report outlines that a proposal is under consultation to extend the standard settlement route from five to ten years. The report also warns that raising Skilled Worker salary threshold above £41,700 may reduce tax and visa fee revenue.
One change is expected. The MAC has identified English proficiency as a key driver of economic success, leading to expectations that the Home Office will raise the mandatory requirement to Level B2 for sponsored workers by 2026.
What Are the Latest Changes in UK Immigration Rules?
The official report points to a change in how the UK immigration policy is being assessed:
- More emphasis is now placed on long-term economic contribution, rather than short-term labour needs.
- Settlement is linked to time spent on working and paying tax, which backs the government’s consultation to extend the ILR route, open until February 2026.
How Are Employers Affected by the MAC Immigration Report?
If your company sponsors worker on Skilled Worker visas, then it is not a sudden change. It reflects a tightening of the process that has been building since last year:
- Sponsorship costs continue to rise, driven by higher salary thresholds and increased cost of keeping compliant.
- New Entrant Salary Thresholds: A lower salary threshold of £33,400 is proposed for younger and new entrant workers. However, the MAC recommends limiting this discount to a maximum of six years, positioning it as a transitional measure rather than a long-term low-wage route.
- Language requirements are stricter, with more changes applicable from January 2026.
- Settlement plans are becoming less predictable.
The impact will vary across different types of employers:
- Employers with sponsored employees on mid-level salaries may face risk of retention if salary thresholds rise again.
- Businesses with high-pay employees are safe but will still need to meet settlement and language requirements.
- Sponsored workers who are already halfway through their settlement journey may need to rethink longer pathways, if the rules change.
The MAC’s 2025 fiscal model suggests that early settlement creates a net fiscal deficit for the UK. As a result, settlement is increasingly expected to become more ‘earned’ than automatic, with longer residency requirements (up to 10 years) for those not meeting high-income brackets.
How Can Legend Consults Help?
We work with employers to review sponsored employees under current settlement rules and identify if your case can be progressed before requirements tighten.
Contact Legend Consults before the new rules apply.
