Skilled worker salary threshold increase likely to have economic impact, says global immigration firm Fragomen

The UK Government’s attempts to lower migration numbers are taking precedence over economic need, according to a global immigration firm.

From tomorrow, businesses wishing to hire overseas talent through the skilled worker visa will need to pay staff at least a minimum of £38,700. This represents an increase of almost 50 per cent from the current salary threshold of £26,200 and far exceeds the average salary for large parts of the country.

At the same time, the going rate of pay for specific occupations will increase to the median pay. An IT business analyst coming to the UK will now need to be paid nearly £52,000 to secure sponsorship under the skilled worker visa route - a rise of 38 per cent on current rates.

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The new thresholds, according to Fragomen, have the potential to negatively impact the UK economy with manufacturing, construction and hospitality businesses among the hardest hit industries.

Charlotte Wills, partner at Fragomen.Charlotte Wills, partner at Fragomen.
Charlotte Wills, partner at Fragomen.

Louise Haycock, a partner at Fragomen, the global immigration law firm which has an office in Sheffield, said: “(It) is simply unaffordable for many businesses. The UK immigration system is already one of the most expensive in the world, and this increase effectively closes overseas recruitment to UK industry for some businesses.

“Many sectors, particularly manufacturing, construction and hospitality, continue to rely on overseas workers, with businesses not yet having sufficient time to see the benefits of programmes they have in place to upskill the resident workforce. Businesses are also required to pay the high Immigration Skills Charge when sponsoring workers - greater transparency is needed in how the Government is spending this money to support sector training initiatives.”

Charlotte Wills, partner at Fragomen, added: “The Migration Advisory Committee conducted a Rapid Review earlier in 2024 and will later this year lead a wider review of immigration and the needs of industry. Its recommendations are likely be reflected in changes to the Immigration Salary List (ISL) which replaces the Shortage Occupation List. Roles that make it onto the ISL benefit from a 20 per cent discount on the skilled worker salary threshold reducing it to £30,960.

“Whilst this will not negate the 4 April increases, it will help – but only for those roles and industries included on the ISL.”