Settled status and permanent residence are both immigration statuses in the UK, but they differ in certain aspects.
EU Settled Status and Permanent Residence:
What is permanent residence?
UK permanent residence status was an immigration status open to EU citizens, as well as EEA and Swiss citizens and non-EEA family members, which allowed the holder indefinite permission to live and remain in the UK free from immigration control. Permanent residence could be proven by applying for a permanent residence card which could then be used by the EU citizen to establish the residence requirement when applying for British citizenship. Prior to the UK’s exit from the European Union, EU citizens, as well as EEA and Swiss citizens, including non-EEA family members, acquired an automatic right of permanent residence in host EU member states in which they had legally resided for a continuous 5-year period.
Under the previous rules, while it was not a mandatory requirement for qualifying EU citizens to apply for a permanent residence card in the UK to prove their status, the permanent residence document was needed to apply for British citizenship or for use as documentary evidence with authorities, employers or other administrative formalities.
What is the EU settled status?
Following the end of EU freedom of movement and the introduction of a new points-based immigration system, new rules were introduced for EU citizens who were already living in the UK before the end of the Brexit transition period.
EU citizens that came to the UK after 1 January 2021 are excluded from the EU settlement scheme and instead are required to apply to the UK Home Office for the relevant permission (usually a visa) to come to the UK. EU nationals already in the UK (and their family members) by 31 December 2020 were required to register for settled status by 30 June 2021 to safeguard their indefinite, lawful status in the UK.
EU settled status is the official grant of immigration status by the Home Office that allows EU citizens to continue to live, work and study in the UK on an indefinite basis. With settled status, you retain full access to healthcare and, where eligible, any public funds, including state benefits and pensions. As such, those with settled status continue to access the same rights and benefits they were entitled to under the previous free movement rules. They will also be entitled to leave the UK for up to 5 years without losing their status, and any children born in the UK will automatically be classed as British citizens. However – EU settled status is not an automatic right. EU citizens had to apply for and be granted EU settled status.
How does settled status differ from indefinite leave to remain?
If you have Indefinite Leave to Remain (ILR), you are settled in the UK and can remain in the UK on a permanent basis. ILR is available to EU and non-EU nationals who have resided in the UK for a sufficient period of time on an eligible visa (for example on Skilled worker visa). When applying for immigration permission to enter the UK, it is important to be aware that not all visas provide a pathway to ILR. For instance, a standard visitor visa does not lead to settlement, while, for example, a Skilled Worker visa or an Innovator Founder visa does.
With ILR, you are permitted to:
Work in the UK in any enterprise, occupation, or profession, including self- employment
Study in the UK
Access the NHS for free
Access government benefits and other services
Unrestricted travel to and from the UK
Upon receiving ILR, you will be eligible to apply for British citizenship within 12 months. While your right to remain in the UK is permanent, it can expire if you spend more than two years abroad. However, you might return even for one day to break the ‘cycle of absence’ and leave again if needed. If you lose your ILR due to absence from the UK, you will have to apply for a Returning Resident visa to be allowed permission to return to the UK.
Basically those are the difference between EU settled status and permanent residence.