UK Visa Restrictions Could Cost Economy Up to £10.8bn, Home Office Warns
Sweeping new UK immigration reforms could wipe as much as £10.8 billion from the economy over the next five years, according to a new Home Office impact assessment. The report warns that tougher visa rules—introduced to curb legal migration—may slow economic growth, reduce tax revenues and place further strain on essential public services.
The projected fiscal hit ranges from £2.2bn to £10.8bn, with a base estimate of £5.4bn, including an £800m drop in visa fee income and billions in lost income tax receipts.
Despite this, the Home Office argues the financial losses may be counterbalanced by “unquantifiable benefits,” citing government plans to rebuild the domestic workforce, boost skills and reduce reliance on low-wage migrant labour.
Recent reforms include ending overseas recruitment for care workers, raising the Skilled Worker Visa salary threshold to £41,700, and introducing stricter A-level standard English requirements for work visas starting in 2026. These measures were rolled out across 2025 and continue into 2026.
Official data shows a major decline in work-related migration. Health and care visas dropped 89% from their December 2023 peak, falling to 17,000 in the most recent year. Skilled worker visas also declined sharply to 35,000, a 46% decrease from the previous year.
Prime Minister Sir Keir Starmer described the reductions as “a step in the right direction.”
However, experts warn of long-term consequences. Dr Dora Olivia Vicol, CEO of the Work Rights Centre, said the findings highlight a “major blow to public finances,” arguing that restricting medium-skilled migration and eliminating international recruitment for care roles will leave vulnerable communities without essential support.
She added that the economic losses are “almost certain,” while the supposed benefits remain “uncertain and intangible,” leaving the UK “with a lot to lose and little to gain.”
