Community Pharmacy England responds to Autumn Budget 2025
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Analysis from Community Pharmacy England (CPE) in its response to the budget has outlined the most impactful implications for community pharmacies and the expected outcomes, both positive and negative.
Delivered by Chancellor Rachel Reeves on 26th November, the Autumn Budget 2025 made clear steps towards strengthening the NHS, with key focuses on technological investment and neighbourhood health. It didn’t, however, provide any clarity on a much-needed sustainable funding and operating model for community pharmacies. Without clear guidelines and a plan to plug the funding gap, which currently stands at over £2 billion, service delivery will continue to be compromised.
Whilst the sector has seen unprecedented new investments this year, it is still feeling the effects of the 30% cut in real-terms funding since 2015 with the Autumn Budget only adding to the increasingly serious concerns about the long-term outlook for the sector.
Key implications outlined included:
- An increase in National Living Wage is estimated to cost the sector an additional £69-94 million per year from April 2026. (With increased workloads largely due to rising volumes of prescriptions, pharmacists are also under pressure to increase minimum wages even beyond this.)
- A freeze on the secondary threshold for employer National Insurance contributions will increase cost pressures even further and is likely to result in further struggles to maintain staffing and training levels, service expansion, or even basic service quality maintenance.
- The current 40% Retail, Hospitality and Leisure (RHL) relief on business costs will end on 31st March 2026. Any increase in business costs will impact community pharmacists negatively, as, unlike GP and dental practices, these costs are not reimbursed by the NHS.
- £300 million has been allocated for capital investment in NHS technology which will allow for better digital integration between healthcare professionals and services across the NHS. This will benefit community pharmacies so long as appropriate investment is allocated towards their digital infrastructures to allow them to participate fully.
Whilst some of these impacts will continue to add financial strain to community pharmacists, some point towards areas of potential expansions and collaboration.
However, unlike other sectors, community pharmacists are unable to increase direct charges for NHS patients to bridge these cost gaps. Without a clear sustainable funding and operating model, many will be stuck in loss-making territories and continue to face closure.
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