Budget 2026 - Immigration impacts

by Rebecca Tester

The government's decision revealed in the Chancellor's Budget to extend the grace period for highly skilled workers at the end of their sponsored employment from 60 days to 6 months is a practical move that will help individuals find alternative work or explore other visa options. This proposal gives highly skilled workers longer to find a new qualifying job, obtain a certificate of sponsorship and update their visa. This change is indicative of the government's intent to maximise the economic contributions of skilled migrants already working in the UK, while retaining their more selective approach to migration overall. 

Lower visa salary requirements

The implementation of the Migration Advisory Committee's (MAC) recommendation lower visa salary requirements from the median to the 25th percentile for specific occupations is a sensible measure that will help UK businesses employ the international talent they need. For some roles, employers will be able to sponsor workers at lower salaries, which could open up a wider pool of overseas candidates - this is particularly relevant for businesses outside of London, where the MAC found the lowered thresholds would be more affordable.   For more analysis on this proposal, read here.

High Potential Individual Visa

The government's strategy to attract global talent is also signalled in their expansion of the High Potential Individual Visa, which allows recent graduates of the top 150 global institutions to work in the UK without a job offer requirement or an employer sponsorship. This is welcome news for businesses, who will benefit from the widened pool of talented overseas graduates while avoiding the bureaucratic obstacles and compliance costs associated with a typical sponsorship process.  For more details about the expanded Global Universities list, read here.

Graduate visa

The retention of the two-year graduate visa for graduates of "high compliance universities where there are strong labour outcomes", rather than the planned reduction to 18 months, is a significant boost for international students, who will have more time to work, gain work experience and search for sponsored employment in the UK. Similarly, the move is likely to be welcomed by a financially strained university sector that draws nearly a quarter of its income from international students, whose visa applications have fallen steadily over the past year.

Earned Settlement Reforms absent from Budget

Notably absent from the budget was any mention of the government's earned settlement reforms, which propose moving the qualifying period for Indefinite Leave to Remain from five to ten years, with reductions for economic contributions, public service and integration. While the Home Secretary – who has acknowledged the perception of these proposals as unfair – has recently signalled that she may be prepared to soften these restrictions, the final model is not expected to be announced until early 2027. Employers that are reliant on international talent consequently face continued uncertainty over settlement timelines and sponsorship costs. This uncertainty extends to existing sponsored workers and their dependents, who are unsure whether they will face the retrospective application of the new rules.

Rebecca Tester is an immigration partner at Constantine Law