Families whose asylum claims have been rejected could be offered payments of up to £40,000 to leave the UK under a new government pilot scheme.
Home Secretary Shabana Mahmood announced the proposal as part of a wider effort to cut the cost of the asylum system and increase the number of voluntary departures.
Under the plan, families living in taxpayer funded asylum accommodation will be offered up to £10,000 per person to return to their home country. Payments will be capped at four people per household, meaning some families could receive up to £40,000.
Those offered the payment will have seven days to accept the offer. If they refuse, the Home Office says they could face forced removal from the UK.
Around 150 families are expected to be targeted in the initial pilot. Officials believe the scheme could save around £20 million if it succeeds in reducing the number of families being housed at public expense.
Mahmood said the high cost of asylum accommodation was a key reason behind the move. According to the Home Office, housing a family of three in asylum accommodation can cost as much as £158,000 a year.
The government already operates a voluntary returns scheme which provides up to £3,000 in financial support to people who agree to leave the UK. The new pilot would significantly increase the level of payments offered to families.
Speaking at the left leaning think tank the Institute for Public Policy Research, Mahmood said the proposal was designed to encourage more people whose claims had failed to leave the country voluntarily.
She said families had previously been able to remain in the UK for long periods even after their asylum applications had been rejected.
“For too long, families who have failed their claims have known that we are not enforcing our rules,” she said, adding that this had created what she described as a “perverse incentive” for some families to attempt Channel crossings in small boats.
The Home Secretary said ministers were also consulting on how families with children who refuse to leave voluntarily could be removed in what she described as a “humane and effective” way.
The announcement came alongside several other proposed changes to the asylum system.
Mahmood said asylum seekers who commit crimes or work illegally would lose access to government funded accommodation and support payments.
Ministers are also planning to remove the legal duty that currently requires the government to provide support to asylum seekers who may otherwise face destitution while waiting for a decision.
Under wider changes expected to take effect in June, accommodation and financial support will be limited to those who the government believes genuinely need it.
Asylum seekers who are granted the right to work, which usually happens after waiting more than a year for a decision, could lose access to support if they are judged able to support themselves financially.
People who entered the UK on visas that allow them to work and later applied for asylum could also fall under the same rules.
Ministers have also suggested that asylum seekers with assets may be required to contribute towards the cost of their accommodation. Items such as cars and electric bikes could be counted as assets under the proposals.
The new pilot has already drawn criticism from political opponents.
Conservative shadow Home Secretary Chris Philp said the payments were “an insult to the British taxpayer”.
Reform UK’s home affairs spokesman Zia Yusuf also attacked the proposal, describing it as “a prize for breaking in illegally” and arguing that migrants who arrive in the UK unlawfully should instead be detained and deported.
Refugee groups also raised concerns about the policy. The Refugee and Migrant Children’s Consortium, which represents around 100 organisations, warned that families would be given only a week to make what it called a “life changing decision”.
The group said families might not have enough time to seek legal advice before deciding whether to accept the payment.
It also warned that cutting off support for families who refuse to leave could leave some children homeless or without adequate support.
The Refugee Council said the plans could increase rough sleeping and place additional pressure on local councils and the NHS.
The charity argued that speeding up asylum decision making would be a more effective way of reducing costs in the long term.
Government figures show that 82,100 asylum applications were made in the UK in 2025, relating to around 100,600 people. About 58 per cent of those applications were refused.
In the year to December 2025 there were 28,004 voluntary returns from the UK, a rise of five per cent compared with the previous year.
At the end of last year just over 107,000 people were receiving taxpayer funded asylum support, including around 30,000 who were living in hotels.
The government has pledged to end the use of hotels to house asylum seekers by 2029, with plans to move people to lower cost accommodation sites including former military bases.
Mahmood said the government’s goal was to create an asylum system that is “compassionate but controlled”, as she sought to make the case for tougher migration policies within her own party.
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