Adapting to change: Funding trends across the UK Care, Dental, Pharmacy and Childcare Sectors

Recent weeks have seen significant volatility in the global economic outlook, largely driven by Donald Trump’s tariff announcements. This has sparked concerns of a potential global recession and heightened uncertainty around international trade. While it’s difficult to predict the long-term effects of these issues, UK financial commentators suggest the Bank of England may accelerate base rate cuts to counter the recession threat, offering potential relief to business operators. However, it’s still too early to draw firm conclusions, given the unpredictable nature of the Trump administration and its economic policies.

Despite the uncertainty, businesses in needs-driven sectors like care, pharmacy, childcare, and dental have shown remarkable resilience. This article explores how businesses in these industries are adapting to the current economic climate.

The Care Sector

The UK’s aging population, expected to increase by 30% in those over 65 over the next 40 years, places significant pressure on care services already grappling with rising costs and regulatory challenges. While global tariffs themselves have little direct impact, inflationary pressures from higher costs of food, energy, and medical supplies, due to import blockages or retaliatory tariffs, could hinder operators in managing rising expenses or increasing fees.

In addition, the introduction of National Insurance increases will put additional strain on cashflows, particularly in the latter part of 2025. Despite these challenges, the care sector remains resilient. Operators are increasingly adopting AI technologies to streamline operations, reduce costs, and improve care quality, allowing staff to focus more on client needs. While financial pressures have intensified, the sector continues to attract investment, and funders remain interested, though securing finance has become more difficult amid broader economic instability.

Jimmy Johns, Corporate Debt Advisory Director – Healthcare

The Pharmacy Sector

The pharmacy sector is set to receive a £3bn funding boost for 2025/26, providing a solid foundation for pharmacies that have long struggled with fair funding. This recognition of the sector’s vital role in communities will help operators manage rising costs. However, increases in the National Living Wage (NLW), National Insurance, and business rates will continue to strain the bottom line despite the funding boost.

The sector’s ability to navigate these financial pressures will be key to its success. Fortunately, the funding package presents opportunities for refinancing and expansion. Pharmacy operators can leverage this support to secure financial backing and sustain growth amidst ongoing challenges.

David Ward, Corporate Debt Advisory Senior Director – Medical, Childcare & Education

The Childcare & Education Sector

The private nursery sector faces significant change in 2025, with the government's ‘Plan for Change’ introducing expanded funded childcare hours for all children aged 9 months and above. While this will provide some relief, the sector still faces challenges, including higher National Insurance and National Minimum Wage costs, recruitment difficulties, and new guidance on additional charges. A government push towards school-based nurseries is also adding pressure, leaving some lenders cautious about the sector’s future.

Despite these pressures, the nursery sector can use its deep knowledge of the market to provide lenders with a clearer understanding of the evolving landscape. By staying adaptable and informed, nursery operators can continue offering essential services while navigating financial challenges and securing necessary funding for expansion.

David Ward, Corporate Debt Advisory Senior Director – Medical, Childcare & Education

The Dental Sector

The dental market in 2025 is experiencing significant growth and transformation. With first-time buyers, existing owners, and small groups accounting for over 80% of dental practice sales in 2024, the independent segment has driven activity and dominated the transactional landscape. This shift reflects a strong preference for personalised patient care and entrepreneurial spirit within the sector.

However, the industry faces challenges due to increased operational costs, including National Insurance (NI) contributions and wage hikes. These financial pressures, coupled with recruitment struggles, are impacting the bottom line. Despite these challenges, the dental industry remains resilient, with practices adapting to new technologies such as digital dentistry and AI diagnostics, which are enhancing patient outcomes, streamlining operational efficiency, and improving profits.

David Ward, Corporate Debt Advisory Senior Director – Medical, Childcare & Education

Looking Ahead

As the economic environment continues to shift, the UK care, pharmacy, childcare, and dental sectors are proving resilient in the face of adversity. Through innovation, such as AI adoption in care homes, digital transformation in dentistry, and strategic funding in pharmacies and nurseries, businesses are adapting to the pressures of an uncertain world. Though challenges persist, these sectors remain integral to the UK economy, and lender confidence remains strong, albeit increased scrutiny of loan requirements will hinder some borrowers, making navigating the funding market as challenging as ever.  Christie Finance remain available to borrowers seeking competitive funding solutions for refinance and acquisition and development purposes.

The Corporate Debt Advisory team can work with you to discuss your business strategy. If you’d like to explore any of these topics and how they may impact funding for your business, please get in touch:

John Mitchell
Managing Director – Christie Finance
T: +44 (0) 7974 265 259
E: john.mitchell@christiefinance.com

Jimmy Johns
Corporate Debt Advisory Director – Healthcare
T: +44 (0) 7711 767 593
E: jimmy.johns@christiefinance.com

David Ward
Corporate Debt Advisory Senior Director – Medical, Childcare & Education
T: +44 (0) 7815 803 262
E: david.ward@christiefinance.com