We normally use the word settled in relation to people who have their permanent home in the UK and are not expected or required to leave the country.
However, immigration terminology may become overcomplicated even for lawyers, let alone everyone else. And you may be confused between the words that either sound the same or seem to have identical meaning.
I will try to disentangle some of the confusion without creating more.
Settled status vs ILR
Settled status is an immigration category granted to EU nationals and their family members under the EU settlement scheme.
An important difference between settled status and indefinite leave to remain is that settled status is not lost after two years of absences. You can be absent from the UK for five years and keep your settled status.
It is also important that settled status is granted free of charge and there is no requirement to show knowledge of English or to pass the Life in the UK test.
Indefinite leave to remain applications are costly (£2389 per applicant as at the time of writing) and subject to more onerous requirements, including a higher benchmark for good character.
Neither immigration category bears restrictions on the time you can spend in the UK; both give you the right to work, receive public funds and study in the UK without paying the overseas students fees.
Permanent residence vs Settled Status
Permanent residence is the unconditional right of residence acquired by EU nationals and their family members under the EU Citizenship Directive 2004. The Directive was subsequent transposition into a series of domestic documents, the first of which was called Immigration (EEA) Regulations 2006.
The document confirming permanent residence can be backdated and can show the actual date when this right was acquired.
EU rights will not be recognised in the UK after 1 January 2021. Those who want to keep their permanent residence right after Brexit have to apply for settled status.
Settled status is granted by the Home Office to EEA nationals and their family members after they have lived in the UK for five years. It is granted independently of whether you have a permanent right of residence or not. Importantly, it cannot be backdated.
For EU nationals with children born in the UK, the date on the permanent residence document may be the only proof that the children have a birthright to British citizenship. It is therefore vitally important to keep your permanent residence document safe.
It is not yet clear if settled status will be accepted as proof of lawful residence over the five year period required for naturalisation as a British citizen. If you are planning to apply naturalisation, permanent residence document is also a more reliable proof of status for the next five years.
Settlement visa vs settled status
Settlement visa is a rather misleading term when used for UK partner visa and applications for a family reunion by dependent family members of British citizens.
My guess is, it may be called settlement because of the intention of the applicants to settle in the UK for good. However, family members of the points-based system migrants may have a similar intention, but they do not apply for settlement until they actually apply for indefinite leave to remain.
In any case, a settlement visa does not imply an immediately settled status. On the contrary, it is initially granted for 33 months if the application is made from outside the UK or for 30 months if made in the UK. It is then extended for another 30 months. After that, those who are on the so-called five-year route to settlement can apply for indefinite leave to remain. Those who are on the so-called ten-year route have to extend two more times and then apply for indefinite leave to remain.
In other words, applicants for settlement visa become settled after five years of residence or ten years of residence depending on their circumstances.
I hope this explanation makes the terminology a tiny bit clearer. If not, don’t worry. Just let us speak to the Home Office on your behalf.