Britain faces pharmacy crisis amid Rachel Reeves' £310m tax raid with a wave of closures imminent

Pharmacy leaders have warned of potential service cuts and closures amid 'underfunding' and spiralling costs, which are soon to be exacerbated in April following Rachel Reeves' Budget. 'Pharmacies have shut in record numbers and those that are left are currently hanging on by their fingernails', Nick Kaye, chair of the National Pharmacy Association, told This is Money.

From April, pharmacies face a triple whammy of escalating costs in the form of higher employer national insurance contributions, wages and business rates. According to the NPA, the impact of April's tax, rates and pay changes will cost pharmacies across Britain an extra £310million this year. For England alone, the sum is £250million.

Unlike other businesses, pharmacies cannot simply hike their prices to reduce the impact of surging costs. This is because about 90 per cent of the work of pharmacies is funded via the NHS. 'I cannot flex my prices. I can't offer customers three for two deals on their medicine to entice them in', Olivier Picard, a pharmacist in Berkshire, told This is Money.

Feeling queasy: Pharmacy leaders have warned of potential service cuts and closures. The amount of money the Government pays for pharmacy services has not increased since 2014. The NPA, which represents 6,000 independent community pharmacies, has called for immediate additional funding support from the government.

Earlier this month, the NPA demanded that the NHS and Department of Health and Social Care published a 'long-awaited' independent economic analysis of pharmacy underfunding. Mr Kaye said: 'When pharmacies close, it means people have to travel further for care and the pharmacies that remain have to work harder to meet demand.

'When they are forced to cut hours to make ends meet it means people don't have such flexibility to get advice or pick up medicines. 'Pharmacies are growing increasingly concerned about their future. 'Without imminent funding certainty from the government we may be left with little choice but to recommend collective action to ensure pharmacies can survive for the patients who rely on them.'.

Malcolm Harrison, Company Chemists' Association chief executive, told This is Money that 1,700 pharmacies had closed in England since 2017, with deprived areas often hardest hit. He added: 'Core funding for community pharmacy has decreased in real-terms by over £1billion since 2015/16. On average, every pharmacy in England now faces an annual funding shortfall of at least £100,000.

'The amount that the Government pays pharmacies to deliver for the NHS has not increased since 2014, and was actually cut by around £200million in 2026/17. 'Since then, NHS-prescribed items and the number of NHS services delivered by pharmacies has risen considerably. Workload keeps rising, but funding hasn't increased.

'Additionally, there is still a shortage of pharmacists and pharmacy technicians , and the number of community pharmacists is at the lowest level since 2017. 'Pharmacies been forced to make an unprecedented level of efficiency savings, and for many companies the stretch it too great, resulting in pharmacies either reducing their opening hours, or permanently closing altogether.'.

On Wednesday, it emerged that pharmacies may end up being exempt from NICs following an amendment to the National Insurance Contributions (Secondary Class 1 Contributions) Bill, which was approved by the House of Lords on 25 February 2025. Whether or not this comes to fruition, however, remains unclear.

Battling: Sukhi Basra, a pharmacy owner in central London, spoke to This is Money about her plight. Sukhi Basra, a pharmacy owner in central London, told This is Money that the Government's stance has left pharmacies fighting for survival. She said: 'The prolonged impact of cuts to funding to community pharmacies in England have left us fighting not only for our livelihood but also for the very essence of what we've built.

'Our family's life has revolved around our pharmacy, and we've never hesitated to make sacrifices because we believed in the difference we were making. 'The financial pressures caused by the delays in fair funding have forced us into heart-wrenching decisions.

'My husband has had to step away from our own pharmacy to work as a locum elsewhere, while I've stayed behind with our dedicated team to keep things running. 'It's a cruel irony—to leave the very business we've built, the patients we've served, and the community we love, just to secure enough income to survive.

'We've always gone above and beyond for our patients. Late-night openings, weekend services, and the extra time we gave to those in need were part of who we were as a pharmacy. 'But now, those services are gone. The reality of operating on such tight margins has left us with no choice but to cut back. Each decision feels like a failure—not of effort, but of resources.'.

Mrs Basra added: 'We've given so much of ourselves and our family to this profession. 'We've spent years building relationships, supporting our patients, and making our pharmacy a place they could rely on. But now, we feel abandoned by the very system we've supported.