Health and social care businesses in the UK are showing increased demand for their products and services, while also building cash reserves and planning significant investments in artificial intelligence (AI), according to the latest Barclays Business Prosperity Index report. The study combines external research from 500 business leaders with anonymised data from around 35,000 UK health and social care businesses, reviewing performance in the third quarter of 2025 and looking ahead to future trends.
The report found that nearly three-quarters (74%) of sector leaders saw stronger than average demand during Q3. Small and medium-sized enterprises (SMEs) were especially focused on financial resilience, increasing their savings by 6.4% year-on-year. In contrast, larger firms experienced a 2.4% decrease in savings over the same period.
Despite a slight drop in cash inflows of 1.1%, spending controls led to a greater reduction in outflows (down 2.2%), resulting in a net cash flow increase of 1.1%.
AI investment emerged as a key priority for many organisations. The majority (86%) plan to boost AI investment over the next year, with business leaders expecting an average increase of 20%. Almost all respondents (96%) believe AI will benefit their operations, with 39% citing potential improvements in clinical outcomes and others highlighting enhancements to patient care quality and user experience.
Leaders also noted AI's role in improving employee wellbeing—38% said it could reduce burnout—and streamlining processes so staff can spend more time with patients. A third indicated that these changes would help retain employees.
However, barriers remain for widespread AI adoption: lack of finance for new equipment or research was cited by 31%, training costs by 27%, and concerns about privacy or responsible use by 32%.
Barclays' client data showed gradual improvement in credit demand during Q3, reflected by a rise in loan volumes—up by 2.8%—mainly among larger corporate clients but also seen among SMEs through increased lending from the Barclays Business Prosperity Fund.
Emma Palmer, Head of Healthcare at Barclays UK Business Banking, commented: “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.”
Steve Fergus, National Head of Healthcare at Barclays Corporate Bank for Large Corporate clients added: “After a period of turbulence and economic uncertainty, an uptick in credit demand and loan volumes across the Corporate Bank indicates growing confidence and ambition to invest in the health and social care sector.
“AI is at the forefront of this ambition and the benefits to patient care are clear. At Barclays, we’re backing these ambitions through our £22bn Business Prosperity Fund and tailored support for innovators. Whether it is helping business leaders navigate their first funding round or connecting them to specialist advice, our Innovation Banking teams are here to unlock growth at every stage of the journey.”
The Barclays Business Prosperity Fund is available for new or existing customers seeking lending or refinancing on projects across both its Business Banking (£6.5m revenue or less) and Corporate Bank divisions (over £6.5m revenue). More details can be found at home.barclays/businessprosperity.