The UK may lose as much as £10.8 billion ($14.4 billion) over the next five years as the government’s new rules on legal immigration take effect, Bloomberg reported. This estimate comes from a new Home Office impact assessment, which explains how the changes could affect the country’s economy. These rules were first shared in a white paper released in May, and most of them officially came into effect in July.
UK could lose billions after new Immigration rules
The report, cited by Bloomberg, stated the total cost could fall anywhere between £2.2 billion ($2.9 billion) and £10.8 billion ($14.4 billion), depending on how the changes play out. In May, Prime Minister Keir Starmer’s government announced a stricter approach to legal immigration, quite similar to the ongoing US immigration crackdown.
The Home Office estimated that the base-case loss to the economy could be around £5.4 billion, though it said there may be “significant unquantifiable benefits” in the future.
Under the new UK system, only graduate-level workers can apply for the Skilled Worker or Health and Care Worker visas. The government also raised the salary requirement for these visas and restricted most overseas social care workers from being recruited.
The rules were initiated right after net migration reached almost 1 million in the year ending June 2023. During the same period, Nigel Farage’s anti-immigration Reform UK party saw a noticeable jump in public support. The latest UK migration data shows a big drop in people staying in the country. In the year ending June 2025, 204,000 fewer people remained in the UK compared to 2023, a fall of about 80%. Indians topped the list, with around 74,000 departures. Chinese nationals were next, with 42,000 leaving.
Where the losses are expected
The impact assessment explained that the UK could lose nearly £800 million ($1.06 billion) in visa fees and health surcharge income. It also warned of a drop of about £9.5 billion ($12.6 billion) in income tax revenue. Public services are expected to feel the pressure given the staffing shortages.
The UK had relaxed visa rules for social care workers in 2022 after Covid and Brexit left care homes without enough staff. However, reports of abuse within the visa system forced the government to tighten the rules again. The Home Office admitted that stopping most foreign care workers from coming could directly affect families, especially if care providers end up charging more.
The latest impact assessment, released more than six months after the clampdown was announced, has raised new questions about whether the decision was rushed. According to Bloomberg, while the goal was to reduce legal immigration, the long-term economic damage may be far bigger than expected.
