Financial Requirement for UK Settlement visa

Part1: Relationship legitimacy Part 2: English ability recognition Part 3: Financial requirement

This last qualifying criteria, part 3 of 3, is by far the most important aspect of this Settlement visa. This requirement focuses on the sponsors (British passport holders) ability to financially accommodate non-EU citizens (South Africans) in the UK.

As previously mentioned in the previous point (Point 2: English ability recognition), this part is the most frequent reason that these Settlement visas are refused. Based on our experience, this requirement determines applicants eligibility (and timing of submission).

FINANCIAL REQUIREMENT

For a sponsor to bring non-EU citizens into the UK, they have to evidence a specified annual household income for their dependents to qualify to join them, subject to the amount of family dependents joining them.

Family application of 1 dependent (one SA national):
British national needs to evidence an annual income of £18 600.

Family application of 2 dependents (two SA nationals):
British national needs to evidence an annual income of £22 400.

Family application of 3 dependents (three SA nationals):
British national needs to evidence an annual income of £24 800.

Family application of 4 dependents (four SA nationals):
British national needs to evidence an annual income of £27 200.

This requirement simply means that emphasis is placed on the British passport holders income (alone). It does not take the applicants income into consideration – which makes this difficult in families where the British national is not the household bread winner.

RECOGNIZED FORMS OF INCOME

The Department of UKVI recognize the following main categories of means to evidence the British nationals household income:

Category A of the UK Settlement visas financial requirement has two conditions. First condition, at the time of submission, past earnings needs to meet the financial requirement.

Second condition, the British passport holder (seen as sponsor) has to demonstrate future ability to maintain this level of income in the UK.

Therefore, sponsors have to evidence recent earnings (from the past 6 months or more) meet the financial requirement and at the time of submission the sponsor has to evidence that they have work (either lined up or continued) in the UK to maintain this level of income.

Often applicants approach us with sponsors only being able to meet one condition (and not both). Hence this financial requirement dictates the timing of submission.

This category primarily caters for fixed income earners (those with fixed monthly salaries). The next category makes provision for fluctuating earnings and commission based income.

This category caters for sponsors (British passport holder) that have been employed less than 6 months with their current employer.

Things get complicated in terms of claiming recognition for earning. Unlike category A, that only has two conditions to qualify, this category has three conditions. Which means more administration and risk (theoretically can be seen as a deterrent).

The three conditions can be broken up into two past earning conditions and one future condition.

The first condition, the sponsor has a more detailed look at their past 12 month income (as opposed to 6 month consideration in category A). A collective 12 month earning (from the immediate 12 months prior to submission) needs to be calculated. This means combined gross monthly income from the immediate twelve months prior to submission is calculated.

The second condition, the sponsor has to take their immediate 6 months payslips, add them together (to calculate a total income from the last 6 months). That income then needs to theoretically be divided by 6 (to get an average monthly payment) and then multiplied by 12 (to get an average annual income – based on the most recent 6 month income). I say theoretically because in practice it is just quicker to add the 6 month income and multiple it by 2 (to get the same result).

The third condition is the same as with category A, which is the sponsor needing to show future ability to maintain the required level of income in the UK.

In these cases, all three conditions need to be met.

It is also important to note that this category makes provision for commission earners and those that fluctuate in their monthly income.

Fixed monthly income derived from assets can be considered here. Interest, dividends and rent income are frequent forms of income claimed under this category.

What is pretty exciting about this category, unlike the above category A or B, is that income from either the sponsor (British passport holder) or the applicant (South African) can be considered jointly.

It is like the British government is saying: “Well, we refuse to acknowledge the applicants salary income because we don’t know how reliable that income is. We will however acknowledge their non-employment income because it shows us that income will be gained from not working”.

Please note that emphasis is placed on household income and not on asset value, meaning that if applicants own SA property for example, they cannot use their asset value towards meeting the financial requirement but rather any rental income that is generated (used in Category C).

This is a popular route with our retired British nationals. It bypasses the need for a UK job offer (ie. the need to demonstrate future earning ability).

Although, saying that, we do get a lot of cases where the British passport holder is not the household bread winner (stay at home wife for example). In those cases, they often for family support to meet this requirement. We often see families get supported for visa purposes.

This route can be combined with category A, C or E to meet any shortfall in income. Any deficit (the amount outstanding) in the above earning requirement, in other words if the sponsors annual income is less than the above threshold, applicants must time the deficit amount by a multiplier of 2.5 and add that total to a based amount of £16 000.

In other words, the formula to calculate cash savings is:

(Deficit amount x 2.5) + £16 000 = Cash Savings required

Attached below is a formula that Move Up has drawn up (our interpretation of the financial requirement) which we believe is far more user-friendly to understand.

What is important to note is that sponsors (or applicants) have to evidence maintained ownership for the 6 months prior to submission. Therefore closing balance alone is not good enough to meet this requirement.

Please note that access to overdraft facility is not considered in these cases.

Again, applicable to our retired candidates, this focuses on the fixed monthly income that the sponsor (British passport holder) derives.

Not too complicated. No further conditions. Focus only on past income to make this a claim towards the sponsors household income.

Although this category also considers the applicants derived pension (which is quite an advantage).

So many South African / British couples that we have come across are self employed in South Africa.

This category is by default the most challenging to evidence (when compared to the other categories).

The conditions of being able to make a claim is very specific.

1. The sponsor (British national) can only claim from their businesses annual net profit.
2. The net profit can only considered from the businesses financial year (aligned with tax compliance).

3. This last part is quite unfair in our opinion but it is compulsory that the sponsor needs a UK job offer (above the financial requirement) together with the above 2 conditions.

All 3 conditions need to be met in order to meet the category F financial requirement.

This category makes provision for self employed British nationals that have not necessarily had the greatest recent business year but the year before that was much better.

Here the British government allows the British national to combined their past 2 years performance and then average them out to see what the businesses average annual wage is.

Therefore, Net Profit over the business financial two most recent years is considered.

Again, the sponsor (British national) will require a UK job offer (to be able to evidence their ability to maintain that level of income in the UK).

DEFICIT IN INCOME

Any deficit (the amount outstanding) in the above financial requirement, in other words if the sponsors annual income (from category A, C and E) is less than the required threshold, applicants can make use of category D (cash savings) to meet the short fall.

To do so, applicants must multiply the deficit amount (which consists of the sponsors past income less the financial requirement) with a multiplier of 2.5 and take that total to add to a based amount of £16 000.

In other words, the formula to calculate cash savings is:

(Deficit amount x 2.5) + £16 000 = Cash Savings required

The example of a British passport holder being married to a South African passport holder. The British passport holder earns a salary in SA of R20 000 per month (before tax) and has a UK job offer (over £18 600pa). Exchange is ZAR20:GBP1.

In this example, the following calculation can be made:

R20 000 (gross monthly salary) x 12 (months) = R240 000 (annual gross income)

R240 000 (annual income) / 20 (exchange rate) = £12 000 (Pound equivalent annual gross income)

Now we can see that the financial requirement is 1 dependent = £18 600 financial requirement.

Taking the sponsors income into consideration means:

£18 600 (financial requirement) less £12 000 (Pound equivalent annual gross income) = £6 600 deficit (shortfall of income required to qualify).

Applying the equation:

(Deficit amount x 2.5) + £16 000 = Cash Savings required

The following can be concluded:

(Deficit amount of £6 600 x 2.5) + £16 000 = Cash Savings required
(£6 600 x 2.5) + £16 000 = Cash Savings required
(£16500) + £16 000 = Cash Savings required

Therefore, one can conclude that in the example 1, the cash savings required is £32 500.

This new total must be held in liquid cash format and must be held for a minimum period of 6 months. This meets Category D’s definition of Cash Savings.

In the above example (Example 1 of 2), we demonstrated how one can combined category A (salary employed) with category D (cash savings).

The complication with the above example is that the sponsor needs to get a UK job offer to meet the qualifying requirements.

This example is going to be similar with one difference (no UK job offer).

The example of a British passport holder being married to a South African passport holder. The British passport holder earns a salary in SA of R20 000 per month (before tax) and DOES NOT have a UK job offer (over £18 600pa). Exchange is ZAR20:GBP1.

From an immigration perspective, I view this case as followed:

The example of a British passport holder being married to a South African passport holder. The British passport holder earns a salary in SA of R20 000 per month (before tax) and DOES NOT have a UK job offer (over £18 600pa). Exchange is ZAR20:GBP1.

Now we knwo that the financial requirement for 1 dependent = £18 600 financial requirement.

Ignoring the sponsors SA income (the R20 000 per month) means:

£18 600 (financial requirement) less £0 income = £18 600 deficit (shortfall of income required to qualify).

Applying the equation:

(Deficit amount x 2.5) + £16 000 = Cash Savings required

The following can be concluded:

(Deficit amount of £18 600 x 2.5) + £16 000 = Cash Savings required
(£18 600 x 2.5) + £16 000 = Cash Savings required
(£46 500) + £16 000 = Cash Savings required

Therefore, one can conclude that in this example 2, the cash savings required is £62 500.

Using category D alone (and not combining any other form of income), means that applicants can bypass the need for a UK job offer. They just need to evidence cash savings maintained in their personal capacity for 6 months prior to submission.

This page serves only a summarized version of what the visa application entails. It also serves to confirm that we are well versed in these cases and dealing with many different unique circumstances.

GET IN TOUCH

More relevant content detailed below.


You are here:

Part 1: Relationship legitimacy.
Part 2: English ability recognition.
Part 3: Financial requirement.


 

To further help in these cases, we have taken the liberty to address the next frequently asked questions from here:

These are examples of marriage dependency cases:

UK Settlement (Step Minor) Visa

Read more about this visa in the description below or get in touch

Get in touch
Our Compliance Our Guarantee
UKIASA k5 move-up-refund-guarantee
UKIASA Case K5 Refund Guarantee
SKU: K5 Category: Tag:
Read More

UK Settlement (Adopted Minor) Visa

Read more about this visa in the description below or get in touch

Get in touch
Our Compliance Our Guarantee
UKIASA k4 move-up-refund-guarantee
UKIASA Case K4 Refund Guarantee
SKU: K4 Category: Tag:
Read More

UK Settlement (Shared Biological Minor) Visa

Read more about this visa in the description below or get in touch

Get in touch
Our Compliance Our Guarantee
UKIASA k3 move-up-refund-guarantee
UKIASA Case K3 Refund Guarantee
SKU: K3 Category: Tag:
Read More

UK Settlement (Married Like Partner) Visa

Read more about this visa in the description below or get in touch

Get in touch
Our Compliance Our Guarantee
UKIASA k2 move-up-refund-guarantee
UKIASA Case K2 Refund Guarantee
SKU: K2 Categories: , Tag:
Read More

UK Ancestry Work Visa (Adopted Minor Dependent)

Read more about this visa in the description below or get in touch

Get in touch
Our Compliance Our Guarantee
UKIASA J5 move-up-refund-guarantee
UKIASA Case J5 Refund Guarantee
SKU: J5 Categories: , Tag:
Read More

UK Ancestry Work Visa (Step Minor Dependent)

Read more about this visa in the description below or get in touch

Get in touch
Our Compliance Our Guarantee
UKIASA J6 move-up-refund-guarantee
UKIASA Case J6 Refund Guarantee
SKU: J6 Categories: , Tag:
Read More

UK Ancestry Work Visa (Shared Biological Minor Dependent)

Read more about this visa in the description below or get in touch

Get in touch
Our Compliance Our Guarantee
UKIASA J4 move-up-refund-guarantee
UKIASA Case J4 Refund Guarantee
SKU: J4 Categories: , Tag:
Read More

UK Ancestry Work Visa (Unmarried Dependent)

Read more about this visa in the description below or get in touch

Get in touch
Our Compliance Our Guarantee
UKIASA J3 move-up-refund-guarantee
UKIASA Case J3 Refund Guarantee
SKU: J3 Categories: , , Tag:
Read More

UK Ancestry Work Visa (Married Dependent)

Read more about this visa in the description below or get in touch

Get in touch
Our Compliance Our Guarantee
UKIASA J2 move-up-refund-guarantee
UKIASA Case J2 Refund Guarantee
Read More

EEA Family Permit

Read more about this visa in the description below or get in touch

Get in touch
Our Compliance Our Guarantee
UKIASA L1 move-up-refund-guarantee
UKIASA Case L1 Refund Guarantee
SKU: L1 Categories: , Tag:
Read More