The Barclays Business Prosperity Index1 report, combining external research of 500 business leaders and anonymised client data of around 35k UK businesses in health and social care looking back on Q3 and ahead to the future, reveals:
- Prior to the Autumn Budget savings buffers increased, most notably amongst SMEs
- Net cash flows displayed signs of recovery amidst disciplined spend control
- The majority (74%) of health and social care businesses reported a stronger than average demand for products and services during Q3
- Almost all (96%) believe AI can benefit their business, with 39 per cent backing its impact on clinical outcomes
- 86 per cent are planning to increase investment in AI over the next 12 months, with leaders estimating an uptick of 20 per cent on average.
Barclays Business Prosperity Index data shows that health and social care businesses are reporting stronger demand for their products and services, as leaders turn to AI to drive efficiencies and improve clinical outcomes.
Nearly three quarters (74%) of business leaders in the health and social care sector reported that sales pipelines and overall demand for their products and services were stronger than average for Q3.
Meanwhile anonymised Barclays client data showed smaller businesses, including those that offer independent high street services, were more likely to build savings buffers. SMEs within Barclays UK Business Bank increased savings by 6.4% year-on-year in Q3, compared to a 2.4% decline among their larger counterparts in the UK Corporate Bank.
Despite a slight decline in cash inflows (1.1%) outflows declined by 2.2%, meaning net cash flow, the difference between cash coming in and going out, was up 1.1%, amid disciplined spend control.
Businesses prioritise investment in AI with clear benefit to patient care
A large majority (86%) of leaders surveyed in the health and social care sector, reported plans to increase investment in AI over the next 12 months, with nine out of 10 (96%) believing that it will deliver tangible benefits for their business.
AI solutions were among the highest investment priorities across the sector, with four in 10 respondents (39%) reporting that AI could improve clinical outcomes. The positive impact on quality of patient care and user experience (cited by 31%) is a clear motivation for increased investment in the technology.
Business leaders also underlined the benefits of AI to their own bottom line, with 38 per cent saying it could improve employee wellbeing and reduce burnout. The same number said that the technology could be used to streamline processes, allowing staff to spend more time with patients, and a third (33%) of respondents said it would improve workforce retention.
This sentiment equates to business leaders reporting to increase AI and tech investment by a fifth (20%) over the next 12 months.
Finance and upskilling key for AI adoption
Despite enthusiasm for the potential of AI, health and social care business leaders called out a number of barriers to investment and implementation, including:
- lack of finance for new equipment or R&D (31%)
- the time and cost involved in training staff to use new AI (27%)
- concerns about privacy, ethics and responsible AI use (32%).
Sector lending and investment looks up
Barclays client data also showed a gradual improvement in credit demand in Q3, suggesting higher confidence and ambition to invest. Loan volumes grew by 2.8% across the quarter – predominantly driven by larger UK Corporate Bank clients, which skew towards sizeable care businesses. The trend was mirrored among smaller firms, with Barclays lending £405m to Business Banking SMEs via the Barclays Business Prosperity Fund, up to Q3 2025.
This lending appetite tallied with businesses across all sizes reporting plans to increase investment across the board, by 6.8% over the next 12 months.
Emma Palmer, Barclays UK Business Banking’s Head of Healthcare, said: “It has been a challenging time for smaller health and social care businesses, with increasing cost pressures and low consumer confidence. This is reflected in the data, with SMEs increasing savings by over six per cent year-on-year in the last quarter, reflecting a cautious approach ahead of the Chancellor’s Autumn Budget. Despite this, we have seen an increase in SME lending, driven by our targeted approach to improving access to finance for health and social care SMEs.
“Looking ahead, it is encouraging to hear the ambition of business leaders to invest in AI technologies to streamline processes, reduce operating costs, and improve patient care.
“We are proud to have lent over £400m to health and social care SMEs this year and are ready to support their investment plans as they aim to grow and improve patient outcomes in 2026.”
To support businesses to invest for growth, The Barclays Business Prosperity Fund2 is available for new and existing Business Banking customers and Corporate Banking clients across the UK, to apply for lending and refinancing on existing projects.
Businesses can read the full Barclays Business Prosperity Index Health and Social Care report and find out more about the Business Prosperity Fund at home.barclays/businessprosperity.
Barclays Business Prosperity Index
This analysis into the sector is part of the Barclays Business Prosperity Index, which combines anonymised client data and external research.
The survey data for this report was conducted among 500 healthcare decision makers across all business sizes, between 21 October to 13 November 2025, by Opinium Research on behalf of Barclays.
For further information about Barclays, please visit home.barclays.
#pharma
#pharmainnovation
#pharmatech
