The great extraction

A migrant worker in the UK can send more money home in a year than many in the Global South will earn in a lifetime. Remittances are a powerful but often overlooked driver of mass migration: we urgently need a national discussion on how remittance flows shape migration incentives and economic outcomes in the UK.

A remittance is a payment sent from one person to another, usually via bank transfer, and though a remittance can refer to any form of payment, it usually refers to an international transfer. Remittances are a common way for migrant workers in the UK to send money back home to their friends and relatives. As immigration to the UK has increased, so has the volume of remittances: the remittance market is valued at approximately £9.3 billion, and growing.  

Remittances are an important economic driver for countries in the Global South. In 2024, £3.3 billion flowed from the UK to India, accounting for more than a third of all UK remittances. Moreover, other large non-EU migrant groups sent substantial amounts of remittances, such as: Pakistan (£2.18 billion), Nigeria (£2.04 billion), China: (£918 million), and Bangladesh (£605 million). As such, remittances are widespread across migrant communities. In the UK, 84% of first generation immigrants transferred money abroad to family and friends, as well as 81% of second generation, and 76% of third. 

Using the example of a care worker, we can demonstrate the incentive structure that surrounds remittances and why the current system encourages migration to the UK. From 2020 to 2024, the UK granted 741,933 Health and Care visas. The majority of these visas (62%) went to applicants from just three countries: India, Nigeria, and Zimbabwe. The table below shows the value of the average net care worker salary in the UK (£23,500 gross) compared to a remittance payment to the migrant’s home country. The assumed remittance level is 22%, the average percentage of income migrants send home.

Country	Income	GDP per Capita	Percentile of earners
UK (net)	£20,439.60	£39,000	~30th
India (excl. fees)	£4,496.71	£1,975	~70th
Nigeria (excl. fees)	£4,496.71	£795	~85th
Zimbabwe (excl. fees)	£4,496.71	£1,830	~90th
UK (net after remittance)	£15,942.89	£39,000	~15th

A relatively low-skill, low-wage job in Britain can have a transformative effect. In India it can elevate a family into relative comfort, and in Nigeria and Zimbabwe the same money confers real middle-to-upper-middle-class security. The ability to convert a low UK wage into high relative income at home materially alters the risk-reward calculation for prospective migrants. 

This may seem like a good deal — migrants come and fill a need in the UK and can send money home to help their family with sustenance, bills or other expenses. However, the system is exploitative for both the workers and the UK.

As we can see, after taxes and remittances, the migrant care worker’s income is significantly below the poverty line. Moreover, these workers are often overworked, and forced to live in squalid conditions. On top of this, many migrants report feeling like the responsibility of supporting their family and friends is too much to bear and that they feel lonely in the UK.

Remittances also have a negative impact on the wider economy. Despite immigration driving population growth and migrants improving the employment-to-population ratio, remittances are allowing billions of pounds to flow out of the UK economy. This does little to boost growth and local business (with the exception of transfer fees, but even these are on the decline) and could partly explain why GDP per capita continues to stagnate. 

Recent polling conducted by Migration Watch UK shows clear demand for reduced immigration. 61% of respondents said that current levels of net migration are too high and the UK’s migration policy is viewed across the electorate as “economically distortive, socially destabilising, and fundamentally beyond democratic consent”. The remittance system is a key incentive driving this current policy.

Despite these issues, the incentives for continuing the status quo are strong. Employers obtain cheaper labour and migrants can siphon transformational levels of wealth back to their countries of origin. The only way to disrupt these market conditions, therefore, is through legislation. This could include increased fees for businesses employing migrants, a substantial tax on remittances (both on a personal and business end), and banning hawala (an informal way of sending money). 

We should revert to employers being required to look locally first, increase earnings thresholds, slim down the list of jobs that employers (including the public sector) claim there is a skills or workforce shortage, limit the number of visas issued and return ultimate responsibility for issuing visas to the Home Office. These interventions do not target migrants directly, but the financial structures that incentivise mass migration.

Remittances sit at the centre of the UK’s migration ecosystem. They help explain both the scale of migration and why the costs and benefits are unevenly distributed. Without addressing these financial incentives, policy changes elsewhere are unlikely to have the scale of effect the British public desire.