UK Unveils £10,000 Asylum Repayment Plan, Tightens Settlement Rules

June 30 () — The United Kingdom Government has unveiled a major overhaul of its asylum system that will require many refugees granted asylum to repay up to £10,000 towards the cost of their accommodation and financial support before they can qualify for permanent settlement.

The reforms, which will be contained in the government’s Immigration and Asylum Bill due to be introduced in Parliament on Tuesday, are part of a broader package aimed at reducing the cost of the asylum system, speeding up the removal of failed asylum seekers and tightening immigration controls.

Under the new policy announced by Home Secretary Shabana Mahmood, eligible adults granted refugee status who later secure employment will be required to make monthly repayments once their earnings exceed a specified threshold. The repayment system is expected to operate in a manner similar to the UK’s student loan scheme.

The Home Office said those covered by the policy would be required to clear the repayment before becoming eligible for Indefinite Leave to Remain (ILR), also known as settled status, which allows migrants to live, work and study permanently in the UK. Officials also disclosed that individuals who leave Britain before repaying the amount in full may be required to settle the outstanding balance if they wish to return in the future.

According to the Home Office, the UK spent about £4 billion on accommodation and support for asylum seekers in 2025. The department estimates that housing an asylum seeker costs an average of £23.25 per night in longer-term dispersal accommodation and £144 per night in hotels, while weekly subsistence payments range from £9.95 to £49.18 per person.

Defending the policy, Mahmood said the cost of supporting asylum seekers remained “too high,” despite the government’s claim that it has already reduced asylum-related expenditure by £1 billion.

“It is right that we ask those who can contribute to do so”, she said, adding that while receiving asylum support is a right, it also comes with responsibilities. When people can contribute and repay the generosity of the British people, we expect them to do so”, the Home Secretary stated.

Beyond the repayment scheme, the Immigration and Asylum Bill proposes further changes to the asylum process, including the creation of a single appeal route designed to prevent unsuccessful applicants from repeatedly bringing fresh claims after their initial applications have been rejected. The government said the measure would help reduce lengthy legal challenges and speed up removals.

The announcement comes as the Home Office continues efforts to phase out the use of hotels for asylum accommodation before the next general election. The department recently confirmed plans to expand the use of former military barracks and other government-owned sites to house asylum seekers after official figures showed the number of people living in asylum hotels had fallen to its lowest level since records began in 2022.