UK Earned Settlement 2026: The New ILR Rules for Indians

Short answer: under the 'earned settlement' plan set out on 2 November 2026, most migrants will wait 10 years for indefinite leave to remain (ILR) in the UK, not 5. People earning over £50,271, and doctors, nurses and teachers, keep a 5-year path; those earning over £125,000 can settle after 3 years. Everyone must meet 4 new conditions, and the changes are expected to be phased in during 2027.

Key points

• The default qualifying period for ILR doubles from 5 years to 10.
• Earning over £50,271, or working as a doctor, nurse or teacher, keeps a 5-year route. Care workers earning £25,000 who joined before May 2025 keep their 5-year path.
• The highest earners, over £125,000, can apply after 3 years.
• Every applicant needs a clean criminal record, English at A-level foreign-language standard, no debts to the UK taxpayer and 3 years of National Insurance contributions.
• The Home Office expects over 500,000 people to wait longer than 5 years.
• Indian nationals were the largest group granted UK settlement in the year to June 2026: 35,384 people.
• Staying longer has a tax side: after 10 of the last 20 tax years of UK residence, UK inheritance tax can reach worldwide assets, including assets in India.

What did the Home Secretary announce on 2 November 2026?

In a statement to the House of Commons, Home Secretary Shabana Mahmood confirmed the government's 'earned settlement' model. Her message was simple: settlement should not be automatic; it should be earned. Instead of one 5-year route for most work visa holders, the time it takes to settle will depend on what a person earns, the work they do and their record in the UK.

The Home Office announcement says the new conditions apply to anyone seeking settlement, regardless of when they arrived, and that settled status will never be removed from anyone who already holds it. It estimates that over 500,000 people will wait longer than 5 years to settle. According to EIN, the changes will be laid from the December Immigration Rules and implemented over the course of 2027.

How long will it take to settle in the UK?

Who	Time to ILR
Earning over £125,000 (the highest earners), and the top talent routes	3 years
Earning over £50,271	5 years
Doctors, nurses and teachers	5 years
Care workers earning £25,000 who joined before May 2025 (transitional)	5 years
Most others (the default)	10 years
People who breached immigration rules	20 years or more

The thresholds are not random. £50,271 is where the UK's higher rate of income tax starts, and the additional rate starts just above £125,140; the Home Secretary called the 3-year group the highest rate taxpayers. In effect, the speed of settlement tracks the income tax band a person's pay falls into in England, Wales and Northern Ireland.

What are the 4 conditions everyone must meet?

1. A clean criminal record. The Home Office calls this a 'spotless' record, a stricter test than before.
2. English to a high standard. The level is equivalent to A-level English as a foreign language.
3. No debts to the UK taxpayer. Unpaid tax or other debts to the state count against you.
4. National Insurance contributions. The Home Secretary set the bar at 3 years of contributions.

People who have claimed benefits will also need a clear period without state support before they apply, and breaches of immigration rules push the wait to 20 years or more. Some groups keep their current path, including Hong Kong British Nationals Overseas, members of the armed forces and those with a British connection.

Why does this matter so much to Indians in the UK?

Because Indians make up the largest single group on the path to settlement. Home Office immigration statistics show 199,628 settlement grants in the year to June 2026, and Indian nationals were the largest group, with 35,384 grants, up 51% on the year before. Indians also received the most Graduate route extensions: 64,495.

For an Indian professional on a Skilled Worker visa, the main question is now salary. Above £50,271, the 5-year path stays open. Below it, the default is 10 years, unless the job is one of the public service roles. As PTI reported, many Indian care workers will still be able to settle within the original 5 years because of the transitional rule.

What does a longer stay mean for UK inheritance tax?

This is the part few people connect with their visa. Since 6 April 2025, UK inheritance tax has been based on residence. Under HMRC's long-term resident rules, a person who has been UK tax resident for 10 of the previous 20 tax years is a long-term UK resident, and inheritance tax then applies to their assets worldwide, not only to UK assets. The standard rate is 40% on the part of an estate above £325,000, before any reliefs or exemptions that apply.

On a 10-year route to settlement, many families will meet that test by the time they settle, or soon after. A flat in Pune, fixed deposits in India or an inherited share in a family property can then fall within UK inheritance tax. Leaving the UK later does not end this at once: long-term residents can stay in scope for up to 10 tax years after they leave, depending on how long they lived in the UK.

Note that tax years and visa years are counted differently. The inheritance tax test looks at UK tax residence in each tax year (6 April to 5 April), which is decided by the Statutory Residence Test, not by the date on a visa.

What should you do now?

1. Find your route. Check whether your salary, now and in the coming years, puts you on the 3, 5 or 10-year path.
2. Keep your records clean. Payslips, P60s, National Insurance records and tax returns all matter more under a contribution-based system.
3. Count tax years, not visa years. Work out the year in which you would become a long-term UK resident for inheritance tax.
4. Map family assets in India. List what you own, what you may inherit, and in whose name each asset is held.
5. Plan both sides together. Immigration, UK tax and Indian tax and FEMA rules interact. Advice that covers all three avoids decisions that solve one problem and create another.

The detailed rules have not yet been published, and the final immigration rules may differ from the announcement in their detail. Check the position again when the rules are laid.

This article is general information, not advice on your situation. Rules may change; outcomes depend on your facts. Team Greenwolf.