Migrants paying the Immigration Health Surcharge are contributing substantially more to the NHS than they receive in healthcare, according to new analysis from the Nuffield Trust, raising fresh questions about the purpose and future of the policy.
The IHS, which is paid by most visa holders as part of their immigration application, has increased dramatically since its introduction. Originally set at £200 per year as a contribution towards healthcare costs, it has risen by more than 400% to £1,035 annually for most applicants, with a reduced rate of £776 for students and child dependants.
New research from the Nuffield Trust suggests that, when combined with standard tax contributions, migrants subject to the surcharge paid at least 60% more into NHS finances during 2023/24 than the Department of Health and Social Care's estimate of the healthcare costs they generated.
The findings challenge a widely held perception that migrants place a disproportionate burden on NHS services. Instead, the analysis indicates that IHS payers are significant net contributors to NHS funding.
Researchers also questioned the evidence used by the Department of Health and Social Care to calculate the average healthcare costs of migrants who pay the surcharge. This raises concerns that the fee itself may be set at a level that exceeds actual expenditure.
The report highlights the growing role of the IHS as a funding stream for the NHS and warns that lower immigration levels could create new financial challenges.
Income generated by the surcharge has surged over the past decade:
- Annual IHS revenue stood between £150 million and £250 million between 2015 and 2018.
- Following successive increases in the surcharge and higher immigration levels, revenues peaked at almost £2.5 billion in 2024/25.
- The charge now accounts for more than 1% of the NHS budget, compared with just 0.1% a decade earlier.
- Revenue fell by more than £100 million to £2.3 billion in 2025/26 as immigration numbers declined.
The Nuffield Trust warns that further reductions in migration could leave the NHS facing the loss of hundreds of millions of pounds each year.
Despite generating significant income, the current structure of the surcharge creates funding volatility.
Applicants are required to pay the full cost of the surcharge upfront for the duration of their visa, often covering a three-year period. However, that money is transferred to and spent by the NHS in the first year rather than being distributed across the lifetime of the visa.
The report argues that this approach makes NHS finances more vulnerable to fluctuations in migration levels, as future reductions in visa applications could quickly reduce incoming funds.
Nuffield Trust Fellow, Stelios Vassiliou, said:
“Whether by accident, by design, or a combination of the two, the Immigration Health Surcharge has grown to a prominence that cannot be ignored. If the level of income from the charge was to fall back to that seen at its inception in 2015/16, the NHS would be left facing a shortfall in the billions, as it has grown reliant on immigrants in this group contributing substantially more to the NHS than they take out. Our analysis should give politicians pause for thought about this unforeseen, and possibly overlooked, consequence of changes to visa rules.
“With around a fifth of the NHS workforce hailing from overseas, it’s well understood that immigration affects NHS staffing. This analysis shines a light on migrant contributions to our health service that receive far less attention.
“The government needs to think carefully about what it’s trying to achieve with the surcharge. We need clarity on whether this policy is about migrants paying their fair share, topping up NHS funding, or discouraging migration in the first place.”
The findings are likely to fuel debate over immigration policy, NHS funding and workforce planning, particularly as political parties continue to discuss measures aimed at reducing net migration. The analysis suggests any future changes will need to consider not only workforce implications but also the substantial financial contribution migrants make through the Immigration Health Surcharge.
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