Policy briefing: Budget 2025

What has been announced?

On Wednesday 26 November 2025, the Chancellor announced the Budget for the coming year and beyond. Of course, the Budget covered the entire UK economy, most of which will not be directly relevant to primary eye care practices. However, there are several areas that may impact practices in a variety of ways. These include:

• An uplift to the National Living Wage which will take effect in April 2026. For those who are 21 or over, the wage is set to rise by 4.1% to £12.71, and by 8.5% to 10.85 for those aged 18-20. For those aged 16 or 17 the minimum wage will rise to £8 per hour
• Income tax thresholds will continue to be frozen until 2028 – meaning the amount you can earn before tax will not increase, and an increased number of people will be pulled into higher tax bands
• The Government is scrapping the two-child limit on Universal credit from April 2026 and providing an above inflation increase to state pension of £550 per year, with working-age benefits such as Universal Credit also increasing by 3.8%
• A new tax has been announced for electric cars and hybrid cars. Electric cars will be taxed at 3p per mile and plug in hybrids will be taxed at 1.5p per mile, this change will start in 2028/29
• There will be an extension to the 5p cut on fuel duty until 31 August 2026, with staggered rises following of 1p in September 2026, 2p in December 2026 and 2p in March 2027
• The cost of an NHS medical prescription in England will remain at £9.90
• Business rate changes have been announced with an increase to high value properties with rateable values of £500,000 or more. However, smaller businesses in the retail, hospitality and leisure sectors will see lower business rates. Those who are eligible for small business rate relief and expand their businesses to another site will now receive additional transition funding
• The total resource for the Department for Health and Social Care (DHSC) has decreased slightly to £231.2bn by 2028/29 from the £232bn announced at the spending review earlier in the year, with capital spending increasing from £13.6bn in 25/26 to £15.2bn in 29/30, this is an increase on the £14.6bn announced at the spending review
• £860m of the NHS funding announced in the Spending Review has been brought forward to pay for the costs of abolishing NHS England
• £300m of the additional capital investment is being allocated to new NHS technology including 250 new neighbourhood health centres across England
• Additional funding has been announced for the devolved nations with £370m for Northern Ireland, £505m for Wales and £820m for Scotland.

What do we say?

There are a number of areas in this budget that may impact optometry practices. Firstly, the uplift to the National Living Wage will add cost pressures for business owners, both directly and indirectly. Meanwhile as NHS funding for General Ophthalmic Services in England still lags far behind the cost of providing the service, and this further increase to staff costs for practices will be unwelcome.

For those who are employed, the freeze on tax thresholds will mean that any pay rises they may receive will not go as far as they would if thresholds had risen.

The business rate changes for small businesses will be reassuring, but for larger businesses in buildings with high rateable values, costs will increase – however, it appears this will only affect a small number of businesses.

The uplift to benefits and the state pension may result in many patients having a slightly increased income, partially offsetting the pressure on practices that the freeze to NHS Optical voucher values has caused. Hopefully this increase will help consumer confidence and mean fewer patients will delay updating their spectacles due to cost pressures.

A new tax on electric and hybrid vehicles will mean that those that switched to vehicles with lower emissions, in some instances to provide domiciliary services, will see an additional cost placed upon them. This may be disappointing for those who made the switch to more environmentally conscious vehicles, which already came with higher purchase costs and less convenience, and will now face an additional tax.

Looking more widely, funding for the NHS across the next three years has decreased in comparison to the Spending Review. This decrease is at least in part to provide the money needed for NHS staff redundancies, as NHS England ceases to exist and merges into the Department of Health and Social Care. The reallocation of £860m from future NHS spending outlined by the Spending Review into the current financial period clearly demonstrates the current state of NHS finances.

However, there is some good news for health spending via the announcement of an additional £300m of capital expenditure – which is funding specifically for buildings, infrastructure and new technology. This includes developing the functionality of technology such as the NHS App, which could mean better access to patient records and subsequently increased quality referrals. As we have said previously, it is imperative that optometry is fully involved as the NHS App evolves, if the full benefits of this project are to be realised.

The increased capital funding will sit alongside new private funding initiatives called Public-Private-Partnerships. This shows the scale of investment needed to deliver the ambitious Government target of creating 250 new neighbourhood health centres; 120 of these centres are proposed to be operational by 2030. Neighbourhood health centres are one proposed solution to tackling GP access challenges and to reduce hospital waiting times – one of the Government’s three key aims ahead of the Budget.

In our view, a simple, quick and far cheaper solution in eye care is to utilise the existing infrastructure provided by optometry practices: practices that are well equipped, well located and with highly trained clinical staff. Many areas already have minor eye care and urgent eye conditions services, but in around 25% of England there is no current service. There are even greater opportunities to commission services for the follow up of low-risk glaucoma patients and to utilise Optical Coherence Tomography across the whole of England.

While renewed investment in the NHS and the prioritisation of neighbourhood health services is right, we argue that support must extend to the whole of primary care if we are to successfully deliver on the Government’s ambition of a hospital to community shift. In the recent Medium Term Planning Framework, primary care was used in a narrow way to mean our GP colleagues. It is only by embracing and funding the whole of primary care, including pharmacy, optometry and dentistry, that real change will be made.