How will new salary thresholds affect UK migration?

By Ben Brindle and Madeleine Sumption

NOTE: This analysis has been updated (3 April 2024) to reflect further policy detail released since the initial salary thresholds announcement.

The Home Secretary announced a series of policy changes designed to reduce migration in December 2023. The announcement followed the release of new official estimates from the Office for National Statistics in November 2023, which suggested that net migration had been unusually high, adding 672,000 to the UK population in the year ending June 2023.

Among the measures set to be introduced in April 2024 is an increase in the minimum salary threshold for both long-term work visas and British or settled people applying to bring their partners to the UK. Both will increase to £38,700, higher than the median salary for full-time employees (£35,000). Migrants coming to the UK on the Skilled Worker route currently need to earn £26,200, and Brits or settled people who want to live in the UK with their partners must currently earn £18,600.

Skilled worker salary thresholds

Although the general threshold is up sharply, only a small proportion of long-term skilled work visa recipients are subject to the new £38,700 requirement. Around half of the 208,000 Skilled Worker visas granted to main applicants in the year ending September 2023 went to care workers and senior care workers, who have been exempted from the increase, while a further 20% went to workers in health or teaching roles that are unaffected because their salaries are set using nationally agreed pay scales.

The impact therefore falls upon the remaining jobs which made up around 30% of visa grants, primarily in the private sector. Many migrants working in these roles already earn more than the new £38,700 threshold, as can be seen in Figure 1, which shows the salaries offered by employers hiring under the Skilled Worker route. In these high-paying roles, the £38,700 general threshold will be less important than changes to the occupation-specific ‘going rate’, an additional threshold employers must also meet.

The going rate was previously set at the 25th percentile of earnings in the occupation but now rises to the 50th percentile (i.e., to median earnings) from April 2024. For example, the going rate for programmers will increase from £34,000 to £49,400.

This will particularly affect occupations where (usually younger) workers earn salaries in the lower half of the distribution. For example, close to half of Skilled Worker migrants who came to work as chartered accountants in the year ending June 2023 would not have met the new occupation-specific rate for the occupation, £46,800 (Figure 1).

Figure 1

Among the minority of jobs subject to the new threshold, some exemptions will remain. Young people and postdoctoral researchers can be paid up to 30% less, for example. The main salary threshold will also be lower for shortage occupations, although the full list of occupations on the new ‘Immigration Salary List’ will not be known until the Migration Advisory Committee conducts a full review, expected this year.

In summary, many of the top occupations receiving visas over the past year would not be heavily affected by the higher general salary threshold of £38,700 but will be affected more by the higher occupation-specific rates. The increase in occupation-specific salary requirements is most likely to affect young people, who generally start on lower salaries within the occupation. They will initially face a lower rate, but will eventually need to meet the higher thresholds.

The largest impact of the increase, however, will likely fall on middle-skilled jobs that are most affected by the £38,700 general salary threshold. This includes roles such as butchers and chefs, where workers last year tended to earn salaries around £26,000, the level of the previous salary threshold. Small businesses and businesses outside of London and the South East tend to pay slightly less, and so would be more affected by the new thresholds too.

Over the past three years, there has been a striking shift in the skilled worker route away from the private sector and towards health and care. By sparing the health and care sector from salary increases, the new measures look likely to further skew the distribution of skilled worker visas in favour of publicly funded jobs. The measures also do not address the underlying problem driving shortages in the care sector: poor pay and conditions for all workers, including Brits.

Minimum income for family members

Another threshold that has been raised is the minimum income requirement for British citizens and settled people who want to live with their family members in the UK. The threshold will rise in three stages, starting at £29,000 in April 2024 and reaching £38,700 in early 2025.

It is not clear why the proposed thresholds for family migration and skilled work migration are the same (£37,800). The Home Secretary indicated that the rationale behind the increase in the family income threshold was to ensure that people were able to support their family members in the UK, whereas the skilled worker threshold was set in line with the median full-time earnings for skilled jobs.

As a result of the increase to the family income threshold, a much lower share of people will be in jobs earning at or above the threshold. Among employees working in the UK in 2023, just under 70% earned less than the new income threshold—up from around 25% under the previous threshold of £18.600. The income threshold will affect some groups more than others. For example, whereas around 60% of men earn less than the new income requirement, this rises to more than 75% for women. The earnings of almost all part-time employees fall below the threshold, too, in effect limiting the right to live in the UK with migrant dependants to full-time workers.

Counterintuitively, the package taken together means that in some circumstances, British workers would face more restrictive rules on family than migrant workers in the same job. For example, health professionals in the NHS who come to the UK on skilled work visas would be able to bring their non-UK citizen partners with them (a new restriction on dependants applies to care and senior workers but not to other health jobs). However, the majority of British nurses working in the NHS earn less than £38,700 per year and so would not have the same rights.

A more detailed analysis of the family income threshold is now available in the Migration Observatory commentary, Family Fortunes? The UK’s new income requirement for partner visas.

Impacts on Migration

Finally, it is unclear how these raised salary thresholds will impact future levels of net migration. The Home Office has estimated that approximately 300,000 of those who received visas last year would not have qualified under the proposed rules.

However, migration patterns seldom remain the same, and therefore the number of people who arrived in the past year on a work or family visa that would not have qualified under the new rules is different to the number of people who will be affected in the years ahead. For example, there is evidence that the number of care visas was already falling before the December 2023 announcement. Indeed, one of the reasons it is so difficult for governments to meet political commitments on migration numbers is that the number of people who take up their policies is unpredictable, and the effects of policy changes hard to assess in advance.

Acknowledgements

Thanks to Jonathan Portes for comments on an earlier draft. This briefing was produced with the support of Trust for London. The Trust is one of the largest independent charitable foundations in London and supports work which tackles poverty and inequality in the capital—more details at www.trustforlondon.org.uk.

 

Underlying FOI data