Highlights:
Migrants who pay to live and work in the UK are contributing substantially more to NHS finances than the estimated cost of the healthcare they receive, according to new analysis by the Nuffield Trust. The findings have reignited debate over immigration, healthcare funding and the purpose of the Immigration Health Surcharge (IHS).
The research found that migrants subject to the surcharge paid at least 60% more into NHS finances in 2023/24, when their standard tax contributions were included, than the Department of Health and Social Care’s estimate of the healthcare costs they generated.
The findings challenge the perception that migrants place an excessive financial burden on the NHS. Instead, they suggest that people paying the surcharge are significant net contributors to the health service.
What is the Immigration Health Surcharge?
The Immigration Health Surcharge is a fee that most people applying for eligible UK visas must pay as part of their immigration application. It is intended to contribute towards the cost of healthcare during their stay in the country.
When introduced, the surcharge was set at £200 per year. It has since risen by more than 400% to £1,035 annually for most applicants. Students and child dependants pay a reduced rate of £776 per year.
Applicants generally pay the full amount upfront for the duration of their visa, which can cover several years. This means migrants may pay thousands of pounds before they begin or continue their stay in the UK.
The Nuffield Trust’s analysis questions whether the government’s estimates of healthcare costs accurately reflect the expenditure associated with migrants who pay the fee. Researchers argue that the evidence used to calculate those costs warrants scrutiny, raising questions about whether the surcharge is set higher than necessary to cover the healthcare migrants use.
How much money does the surcharge raise?
The IHS has become an increasingly important source of NHS funding over the past decade.
- 2015–2018: Annual revenue remained between £150 million and £250 million.
- 2024/25: Revenue reached almost £2.5 billion following increases in the fee and higher immigration levels.
- More than 1%: The surcharge now accounts for over 1% of the NHS budget, compared with around 0.1% a decade ago.
- 2025/26: Revenue fell by more than £100 million to £2.3 billion as immigration numbers declined.
These figures demonstrate how significantly the surcharge has grown as a funding stream. They also reveal a potential vulnerability: if fewer people apply for UK visas, the NHS could receive substantially less money.
The Nuffield Trust warns that further reductions in migration could leave the health service facing the loss of hundreds of millions of pounds annually.
Why could lower immigration affect NHS funding?
One issue highlighted by the report is how the surcharge is collected and spent.
Migrants must pay the fee upfront for the entire duration of their visas, but the money is transferred to and spent by the NHS in the first year rather than being spread across the period covered by the visa.
This arrangement can make NHS finances more sensitive to changes in immigration. When visa applications rise, revenue can increase sharply. When applications decline, incoming funds can fall, potentially creating funding pressures.
The report suggests that the NHS has become increasingly reliant on contributions from migrants who pay the surcharge, making the financial consequences of immigration policy changes an important consideration for health service planning.
What does this mean for immigration policy?
Stelios Vassiliou, a fellow at the Nuffield Trust, said the surcharge had grown into a significant source of NHS income, with migrants in this group contributing substantially more than they take out in healthcare costs.
He warned that a return to revenue levels seen when the policy was introduced in 2015/16 could leave the NHS facing a shortfall running into billions of pounds.
Vassiliou also highlighted the contribution migrants make to NHS staffing, noting that around a fifth of the health service’s workforce comes from overseas.
He argued that the government needs to clarify what the surcharge is intended to achieve: ensuring migrants pay their fair share, providing additional NHS funding or discouraging immigration.
The analysis adds a financial dimension to debates over reducing net migration. While immigration policy affects workforce planning and public services, the findings suggest that changes to visa rules could also have consequences for NHS income.
The central question is whether the surcharge should primarily reflect the healthcare costs migrants incur or serve as a broader source of funding for the health service. According to the Nuffield Trust, the scale of the contribution now makes that distinction increasingly important.
