Major Increases to U.K. Minimum Salary Requirements and Further Visa Rule Changes

December 11, 2023 Reports and White Papers

Update: Please see our 18 January 2024 advisory for further clarification on the U.K. Government's "five-point plan."

On Monday 4 December, Home Secretary James Cleverly announced the U.K. Government’s plans to reduce legal migration to the U.K. by 300,000 in what he described as “the biggest ever reduction in net migration”, but at what cost?

This follows the recent release of the Office of National Statistics’ (ONS) net migration figures of 745,000 for the year ending December 2022, and a provisional estimate of 672,000 for the year ending June 2023.

Cleverly outlined his “five-point plan” aimed at delivering that 300,000 reduction in net migration as follows:

1. Stopping overseas care workers from bringing family dependents to the U.K.

The Health and Care Worker visa was introduced to address shortages in the U.K.’s care sector and National Health Service (NHS), which are still proving to be an issue. Concerns have already been expressed that this measure may discourage health and care workers from coming to the U.K. at all. The health care industry has already experienced significant labour shortages, and this new measure will likely place it under even more strain.

2. Increasing the minimum salary threshold to £38,700

Currently most migrants applying for Skilled Worker visas must earn a minimum of £26,200 per year. This is jumping by a third in spring 2024, although it won’t apply to Health and Care Worker visas in what can be assumed is an attempt to continue to attract those workers on whom Cleverly admitted the U.K.’s care sector and NHS “rely”. For businesses, it will also mean increased National Insurance and pension contributions. This increase will prove hugely challenging for many industries and sectors, such as hospitality. UKHospitality, the trade body for hospitality in the U.K., has stated that 95% of the 8,500 hospitality visas issued last year would not be eligible for visas under these rules.

3. Ending the 20% minimum salary discount for ‘shortage occupations’

The list of ‘shortage occupations’ was meant to acknowledge staffing challenges in particular occupations and assist employers in filling vacant positions in industries or roles where talent was sparse. Ending the salary discount for such roles will undoubtedly make it even more challenging for U.K. companies to address these labour shortages, which could in turn lead to the closure of many businesses.

4. Increase the minimum salary threshold for spouse visas to £38,700

The current financial requirement of £18,600 will more than double in spring 2024. British citizens will need to earn a minimum of £38,700 for their spouse or partner to be able to join them in the U.K., or hold cash savings of approximately £112,750 (if the cash savings calculation currently based on minimum salary requirement is maintained). According to the ONS, median earnings for full-time employees in the U.K. for the tax year ending April 2023 reached only £34,963. If the policy is introduced, it may mean most British citizens could not afford to bring a non-British spouse or partner to the U.K.

5. Migration Advisory Committee to review the graduate route

The graduate route gives students two years to remain in the U.K. following graduation, and many graduates use this time to enter the U.K. labour market. The Migration Advisory Committee will be tasked with reviewing this category to “ensure it works in the best interests of the U.K.”

These measures, if put in place, will have potentially significant ramifications on the U.K. workforce. U.K. employers and companies already struggling to fill labour shortages, especially in highly skilled and niche areas, may simply be unable to afford filling vacancies. This could lead to the reduction of business operations in the U.K., certain business lines being outsourced overseas or even the closure of struggling businesses – none of which is good for the U.K.’s economy.

On top of these new proposed changes, the Immigration Health Surcharge (a mandatory fee an applicant has to pay as part of a visa application to have access to NHS services) is set to rise by 66% in January 2024 from £624 to £1,035 per year. Visa application fees were also increased in October of this year.

Whilst the U.K. Government is clearly concerned about levels of net migration, the impact these rapidly mounting costs will have on U.K. companies’ ability to expand, thrive or even survive should be seriously considered by all relevant stakeholders.

How We Can Help

For any companies concerned about the impact of these proposed changes on their business, and/or companies considering sponsoring foreign workers who are now unsure whether this will affect their plans, it is highly recommended to seek legal advice. The Armstrong Teasdale U.K. Immigration team are well placed to provide further guidance. Please contact your usual AT lawyer or one of the authors from our U.K. Immigration team.

Disclaimer: This publication is provided by Armstrong Teasdale Limited for informational purposes only. The information contained in this publication should not be construed as legal advice. Any questions or further information regarding the matters discussed in this publication can be directed Mairi Lubelska of Armstrong Teasdale’s U.K. immigration team on [email protected].

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