Roughly 80% of net new UK payroll jobs created between 2014 and December 2025 went to foreign nationals, a think tank analysis has concluded, putting immigration and labor-market policy back at the center of the political and economic debate.
The figures suggest that of about 3.7 million additional payroll jobs over the period, British nationals accounted for only around 734,000. Non-EU nationals took the biggest share, at about 2.5 million roles, while EU nationals accounted for another 408,000.
The report arrives as investors and businesses assess a changing UK labor market shaped by post-Brexit migration rules, acute staffing shortages in care and hospitality, and tighter restrictions introduced during 2024 and 2025.
Key Facts
- Of roughly 3.7 million UK payroll jobs added from 2014 to December 2025, about 2.5 million went to non-EU nationals, 408,000 to EU nationals and 734,000 to Britons.
- HMRC payroll data show 32 million payrolled workers in December 2025, including 25.6 million British nationals.
- Since January 2020, non-EU nationals gained about 2.1 million payroll jobs, while Britons lost about 186,000 and EU nationals lost about 352,000.
- Four sectors made up about two-thirds of the non-EU increase: health and social work at 29%, administrative and support services at 16%, accommodation and food at 12%, and wholesale and retail at 10%.
- Net migration was estimated at 171,000 in 2025, down from 331,000 a year earlier, while work-related arrivals of non-EU nationals fell 47% to about 146,000 after rule changes.
UK Payroll Jobs
The core claim is straightforward: foreign nationals captured the overwhelming majority of net payroll job growth in the UK over the last decade, with the trend accelerating after 2020. London stands out most sharply, where non-EU payroll jobs rose by 465,200 since 2020, while British payroll jobs fell by 26,500 and EU payroll jobs fell by 171,100. Similar patterns appeared in other areas, including Scotland and the South East.
That matters because payroll growth is often treated as a sign of economic resilience. But net changes in employment do not necessarily show who was hired into a new vacancy; they show how the stock of jobs held by each group changed over time. That distinction is critical. A decline in payroll jobs held by Britons can happen even if many Britons were hired during the same period, because exits, retirements or shifts in nationality status can alter the balance.
Even so, the data point to a labor market increasingly reliant on foreign labor, especially outside the EU. Employers in health and social care, hospitality, retail and support services have faced persistent recruitment shortages, and migration became a practical answer to fill vacancies quickly. For policymakers, the question is whether that solved a temporary labor mismatch or created a deeper dependence on imported labor while domestic inactivity and benefit reliance remained elevated.
Britain’s jobs market appears to have expanded with growing dependence on non-EU labor, even as large numbers of working-age adults remained outside employment.
Why care and services drove the shift
The sector mix helps explain the trend. Health and social work alone accounted for 29% of the non-EU increase in payroll jobs, reflecting the severe staffing pressures in care services and parts of the NHS-linked labor pipeline. In the year to March 2023, about 57,700 care and senior care workers received skilled-worker visas, while 99% of sponsored care workers in 2022 came from outside the EU.
That wave has since slowed. Changes to immigration rules, including the closure of parts of the Health and Care route for overseas care workers, contributed to a 47% drop in work-related arrivals of non-EU nationals in 2025. Because the payroll analysis runs only to December 2025, it captures much of the hiring surge but only part of the effect from tighter restrictions. That leaves open the possibility of a different labor-market picture in 2026 and beyond, particularly if employers struggle to replace overseas recruitment with domestic hiring.
Implications for Investors
For investors, the immediate takeaway is that several labor-intensive sectors in the UK remain highly exposed to migration policy. Companies in social care, staffing, hospitality, support services and retail may face rising wage bills and recruitment friction if the supply of overseas workers continues to tighten. That could pressure margins, especially for businesses with low pricing power or public-sector funding constraints.
At the macro level, the figures sharpen the debate over the quality of UK growth. The report argues that real GDP grew 26% from 2006 to 2025, while real GDP per person rose only 10%, suggesting headline expansion may have been flattered by population and workforce growth rather than stronger productivity. Investors tracking sterling assets, gilts and domestically focused equities should watch whether future growth becomes more dependent on productivity gains, labor-force participation and capital investment instead of labor importation.
The welfare element adds another layer. The report estimates 6.7 million people are on at least one out-of-work benefit, about one in six working-age adults, with working-age benefit costs forecast at 136.1 billion pounds in 2026/27. While some of the calculations around foreign-national benefit claims are estimates rather than official statistics, the broader fiscal issue is material: if labor shortages coexist with high inactivity, future governments may face pressure to spend more on training, work incentives and local employment programs, while also maintaining tighter migration controls. That combination could reshape fiscal priorities across consumer, housing and public-service sectors.
Investors should also be careful not to overread the data. Net payroll changes by nationality are not the same as a direct measure of who filled newly created jobs, and naturalized citizens are counted as British. Even so, the trend highlights a UK labor market that has been rebalanced by policy, demography and sector demand. The next phase will depend on whether falling migration inflows expose labor shortages more clearly or push businesses to invest in automation, wages and domestic recruitment.
The key watch points for 2026 are updated payroll composition, vacancy rates in care and hospitality, and whether lower migration starts to weigh on output growth. For markets, the bigger question is whether the UK can shift from labor-supply expansion to productivity-led growth without a material hit to earnings or public finances.