Community pharmacy funding 2026: What the new settlement means for owners

Key facts 

• Total pharmacy funding: £3.636bn (+10.3% year-on-year, ~£340m increase) 
• Margin allowance increase: £200m 
• Contract over-delivery write-off: up to £239m saved for pharmacy owners 
• Single Activity Fee: up 6p to £1.52 per item 
• Independent prescribers: 32% of England pharmacists were IP-qualified in 2025; all new graduates from September 2026 qualify as prescribers on GPhC registration 

While the settlement has been broadly welcomed, it also underscores a pivotal moment for pharmacy owners and operators: the need to adapt, evolve, and maximise emerging opportunities in a challenging operating environment. 

The 2026 pharmacy funding settlement explained 

The uplift includes a £200 million increase in the margin allowance and a significant concession to write off net contract (margin) over-delivery accumulated up to March 2026. This measure alone could save pharmacy owners up to £239 million in recovery costs, an intervention designed to help stabilise an increasingly volatile medicines supply chain. 

Importantly, the settlement places a renewed emphasis on dispensing activity. The Single Activity Fee has increased by 6 pence to £1.52 per item, reinforcing the importance of core dispensing income. In contrast, clinical service fees have remained largely unchanged, indicating that the immediate priority is sustaining core operations rather than expanding service-based income streams. 

Despite these improvements, many in the sector argue that the funding uplift does not fully offset years of historic underinvestment. As a result, pharmacies must continue to innovate and adapt to remain financially sustainable. 

Why patient-centric care is reshaping pharmacy 

Successful pharmacies today are no longer defined solely by high prescription volumes. Increasingly, those that thrive are patient-centric businesses, offering personalised, compassionate care and tailoring services to the needs of their local communities. 

This shift highlights the importance of investing in staff development. The growing role of Independent Prescriber (IP) pharmacists is particularly significant. In 2025, approximately 32% of pharmacists in England were IP-qualified, and this figure is set to rise sharply as all new pharmacy graduates from September 2026 will qualify as prescribers upon registration with the General Pharmaceutical Council (GPhC). 

For pharmacy owners, this presents a valuable opportunity to broaden service offerings, enhance patient engagement, and unlock additional revenue streams across both NHS and private services, whether they are IP qualified themselves or are making recruitment decisions on new employees or locums best suited to their business. 

Rising costs: What's driving them and how owners are responding 

Despite improved funding, pharmacies continue to face mounting financial pressures. Increases in the National Minimum Wage, higher employer National Insurance contributions, the end of business rates relief, fluctuating utility costs, and ongoing drug tariff volatility all contribute to a challenging cost environment. 

To counter these pressures, operators are increasingly focused on efficiency. Key strategies include: 

• Strengthening supplier relationships to better manage medicine shortages and fluctuating daily drug tariffs 
• Early identification of supply chain disruptions 
• Investment in digital solutions and automation 

Automation, in particular, is gaining traction, not only as a way to offset rising labour costs but also to reallocate staff time away from repetitive dispensing tasks and towards higher-value, patient-facing activities. 

Is pharmacy lending still accessible in 2026? 

Recent high-profile pharmacy group administrations prompted concerns that lenders might adopt a more cautious stance toward the sector. Indeed, there were indications that some banks were reassessing their exposure to community pharmacy lending and questioning the sustainability of preferential lending terms. 

However, the more favourable-than-expected funding settlement appears to have reassured many stakeholders. For now, lender confidence has stabilised, and funding remains accessible for well-structured and well-managed businesses. 

At Christie Finance, recent pharmacy transactions have continued to receive strong support from banks. This reflects a proactive approach to addressing lender concerns, particularly around management capability, operational structure, and the presence of experienced advisory teams. 

Key takeaways for pharmacy owners 

The 2026 funding settlement represents a timely and much-needed boost for community pharmacy. However, it does not remove the fundamental challenges facing the sector. Pharmacies that succeed in this evolving landscape will be those that: 

• Embrace patient-centric care models 
• Invest in workforce development and prescribing capabilities 
• Leverage technology to improve efficiency 
• Maintain strong financial discipline and operational resilience 

In a sector defined by both opportunity and pressure, adaptability will remain the key determinant of long-term success. 

Frequently asked questions 

How much has pharmacy funding increased in 2026? 

Total community pharmacy funding rose to £3.636 billion in the May 2026 settlement, a 10.3% year-on-year increase of approximately £340 million. 

What is the Single Activity Fee in 2026? 

The Single Activity Fee (SAF) increased by 6 pence to £1.52 per item as part of the 2026 settlement. 

Is pharmacy funding accessible for a sale or refinance in 2026? 

Yes. Despite earlier lender caution following high-profile administrations, funding remains accessible for well-structured, well-managed pharmacy businesses, with Christie Finance reporting continued strong bank support for pharmacy transactions. 

If you're weighing up your options in this changing landscape, whether that's growth, refinancing, or a sale, speak with Christie Finance around potential funding solutions, or Christie & Co's pharmacy team who can help you understand what your business is worth in today's market