How much higher will the new Skilled Worker going rates be?

The Government has announced significant changes to curb employment-based immigration to the UK.

Currently, to be sponsored as a Skilled Worker in the UK, the salary on offer must be equal to or above all of the following minimum levels:

• The general threshold (currently £26,200 per year);
• £10.75 per hour; and
• The ‘going rate’ for the type of job.

On 4 December 2023 the Government announced an increase of nearly 50% to the general threshold from £26,200 to £38,700 per year. 

On 21 December 2023, it further announced that it will also raise the individual occupation going rates in line with the latest national salary data.

These changes are due to come into effect in April 2024.

Just how high could the new going rates be?  We have conducted a research exercise analysing publicly available data to predict the increase in going rates for some common occupation codes.

What are going rates?
 

Every eligible Skilled Worker job has to be mapped to a specific ‘occupation code’ (also known as a Standard Occupational Classification code). Each occupation code has an annual going rate – a minimum salary. 

The annual going rate is for a 37.5-hour working week. If a sponsored worker has a different working pattern the annual going rate is adjusted pro rata.

The current annual going rates are set at the 25^th percentile of the Office for National Statistics (ONS) Annual Survey of Hours and Earnings (ASHE) 2021 full-time salary data for each occupation code.

The current eligible occupations and going rates are published here.

How will going rates change?

Going rates to be increased from the 25^th percentile to the median, using latest salary data

• For new Skilled Workers.  From April 2024 the going rates for new applicants will be increased from the 25^th percentile to the median (50^th percentile) for each occupation code, using ASHE data from 2023 instead of 2021. For many occupation codes this will mean a big jump.
   
• For existing (pre-April 2024) Skilled Workers.  Those already in the Skilled Worker route before the April changes will be exempt from the new median (50^th percentile) going rates and the new £38,700 general threshold when they change sponsor, extend, or settle. For them, the going rates will continue to be set at the 25^th percentile for each occupation code, but based on the latest ASHE 2023 instead of 2021 data. This means that the rates will increase to some extent, although not nearly as much as for new applicants.

20% discount for jobs on the Shortage Occupation List to be removed

At the moment there is a 20% discount on the going rates for occupations on the Shortage Occupation List. The list is to be renamed the Immigration Salary List and the going rate discount will be removed.  As a result, the effective going rates for many of these occupations will increase sharply.

Jobs on the Immigration Salary List will still benefit from a lower general threshold – possibly 80% of the new higher £38,700 threshold, which would make the lower threshold £30,960. But in many cases the lower threshold will be irrelevant because the new going rates will be much higher than this.

The Migration Advisory Committee has been asked by the government to quickly review the jobs on the shortage occupation list and report back by 23 February 2024.

2020 occupation code list to replace current 2010 list

The system of occupation codes used for Skilled Worker applications will be updated from the current SOC 2010 to SOC 2020. In SOC 2020 many codes have been renumbered, renamed, merged or split out. We expect the Home Office to set out details of any changes such that for extension applications for Skilled Workers in the same role, sponsors will be able to see if they need to use a new code. 

Predicted new annual going rates

We have used the data published by the ONS in its ASHE 2023 figures to predict the new increased annual going rates for some popular Skilled Worker occupations listed below:

*These occupations are on the Shortage Occupation List, which means that the current going rate is discounted by 20%. The discounted rate is shown in the table above.

What about the ‘new entrant’ going rate for young people and graduates?

At the moment, a lower general threshold and discounted going rates apply to ‘new entrants’ (including those switching from a Student or Graduate visa to Skilled Worker; those under 26 years old; and those working towards registration/becoming chartered such as architects, accountants and solicitors).

The new entrant rate is only available for 4 years. This includes any time spent on a Graduate visa. At the end of the 4-year period the worker can only extend their visa if their salary is at or above the usual general threshold and the full going rate for the occupation code.

The Government has not said how this might change in April 2024. Possible changes are as follows:      

• New entrant general threshold. At the moment, the £26,200 general threshold is reduced for new entrants by 20% to £20,960. If a 20% reduction will also apply to the new £38,700 general threshold the figure for new entrants will be £30,960.
   
• New entrant going rates. Currently, for new entrants the going rate is discounted by 30%.  If the same discount applies to the new going rates, this will reduce the going rate for many occupation codes to around the level of the possible lower general threshold for new entrants: £30,960. But in some cases the discounted going rate may be higher than this. For instance, applying a 30% discount to the anticipated new going rate for Architects (£45,894) produces a figure of £32,126.

As a result, employers need to be aware that if they want to recruit recently-graduated international students into graduate programmes or junior roles they may not be able to sponsor them under the Skilled Worker route straightaway unless the salary is well over £30,000 per year. Even if the salary is at that level, it may have to increase fast if the employer wants to keep the worker at the end of the 4-year new entrant period.

When will we know more?

The increases will require changes to the Immigration Rules. There is usually a gap of at least 21 days between publication of the new rules and the changes coming into force. The Government has said that the changes will come into force in April so the new rules may be published in March – possibly sooner – and in the meantime there may be separate policy announcements.

Further information

If you have any queries on the above or any other immigration matter, please contact a member of the immigration team.  

about the authors

Kim covers all areas of business immigration. He manages a team advising a wide range of clients, from entrepreneurs and start-ups to multinational corporations. He and his team handle every type of visa and sponsor licensing issue. Clients include companies in the finance, media, legal, hospitality, technology and renewable energy sectors.

Tim joined the immigration team as a professional support lawyer in June 2019. He is a solicitor with extensive experience in corporate and private client immigration matters and is responsible for the immigration team’s knowledge management and development.