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Using same methodology as government's £10 billion lifetime cost estimate for care workers, analysis highlights overall fiscal benefit of skilled migration
As ministers finalise 'earned settlement' reforms, IPPR welcomes signs of a compromise

Skilled migrants and their adult dependants due to settle in the UK under current settlement rules are expected to contribute £115bn more to UK public finances than they cost over their lifetimes, according to new analysis by the Institute for Public Policy Research (IPPR).

Using the same methodology as home office analysis which estimated a £10 billion net lifetime fiscal cost from care workers and their adult dependants, IPPR's findings reveal the substantial contribution made overall by skilled migrants through the taxes they pay.

The analysis, which combines forecasts of future settlement in 2026-2030 under the existing five-year ILR rules with estimates of lifetime fiscal contributions, highlights the wider fiscal picture ministers must consider when making decisions about migration policy. The analysis covers all skilled workers and health and care workers, including those working in social care.

The findings come as the government considers major changes to the UK's settlement system, which could see many migrants waiting a default 10 or 15 years to secure indefinite leave to remain (ILR), rather than the current five. Under the proposed 'earned settlement' model, the qualifying period would vary depending on factors including earnings and occupation.

Crucially, the changes could apply retrospectively to people already living and working in Britain, who arrived expecting to qualify for permanent residence after five years.

With a final decision expected soon, IPPR:

Welcomes signs that care workers will remain on their current five-year route: this would protect from exploitation one of the largest and highest-risk groups already in the UK.
Proposes finding a compromise for other cohorts who are already in the UK on routes to settlement: this could mean allowing them to also stay on a five-year route, or alternatively introducing an interim status after five years, providing a pathway to permanent residence and the freedom to change jobs without employer sponsorship.

Marley Morris, associate director for migration, trade and communities at IPPR, said:

"Public debate has focused heavily on the costs of recent migration, but this is not the whole story. Our analysis suggests that over their lifetimes skilled migrants are estimated to make a net contribution of billions to the public finances.

"We welcome signs that the government is planning a compromise for its settlement reforms. Ministers should honour the rules people came here under or offer a fair compromise that gives them a secure pathway to settlement and freedom to change jobs after five years."

ENDS

Marley Morris is available for interview

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David Wastell, director of news and communications: 07921 403651 [email protected]

Rosie Okumbe, senior digital and media officer: 07825 185421 [email protected]

NOTES TO EDITORS

The IPPR paper, Earned settlement: Decision time, by Marley Morris, is published at 0001 on Monday Nov 2. It will be available for download at: https://www.ippr.org/articles/earned-settlement-decision-time
IPPR estimated the net lifetime fiscal impact of skilled workers (including health and care workers) and their adult dependants expected to settle in 2026-30 under existing five-year ILR rules. The analysis followed the methodology used by the Home Office to estimate the net lifetime fiscal impact of care workers and adult dependants. Migration Advisory Committee per person net lifetime fiscal estimates for the cohort of 2022/23 arrivals were applied to estimates of the number of skilled worker main applicants and adult dependants expected to settle in 2026-30. Note one limitation of the methodology is that the composition of the 2022/23 cohort may differ from the cohort expected to settle in 2026-30. Figures are in 2022/23 prices.
IPPR (the Institute for Public Policy Research) is the UK’s most influential think tank, with alumni in Downing Street, the cabinet and parliament. We are the practical ideas factory behind many of the current government’s flagship policies, including changes to fiscal rules, the creation of a National Wealth Fund, GB Energy, devolution, and reforms to the NHS. As an independent charity working towards a fairer, greener, and more prosperous society, we have spent almost 40 years creating tangible progressive change - turning bold ideas into common sense realities.