Prepare for the end of BPS delinked payments

What are delinked payments?

Delinked payments are the transitional payments that replaced BPS from 2024, after BPS ended on 31 December 2023. The key differences from BPS:

The "delinked" name reflects that payments are no longer linked to land or farming activity. Even if you have sold your farm or stopped farming, you continue to receive delinked payments until the scheme ends - based solely on your historical BPS claims.

Payment reduction schedule 2024-2027

Delinked payments were always planned to reduce progressively. However, the rate of reduction was accelerated significantly in the October 2024 Budget and confirmed in the June 2025 Spending Review.

In 2024 reductions were banded with no overall cap (50% on the first £30,000, rising to 70% on the highest band). The 2025 reductions (76% on the first £30,000, 100% above, maximum payment £7,200) were set by the Agriculture (Delinked Payments) (Reductions) (England) Regulations 2025. The 2026 and 2027 reductions (98% on the first £30,000, 100% above, maximum payment £600) are set by the separate Agriculture (Delinked Payments) (Reductions) (England) Regulations 2026.

What the accelerated reductions mean in practice

The impact is stark. Consider a farm with a £50,000 reference amount (historically a medium-sized BPS claim):

Farms that previously received higher BPS payments face the same maximum payment (£7,200 in 2025, £600 in 2026-2027) as smaller farms, because all payments above the first £30,000 of reference amount now receive zero payment.

Understanding your reference amount

Your reference amount determines your delinked payment. Understanding how it was calculated helps you plan for the transition.

Finding your reference amount

1. Sign in to the Rural Payments service
2. Navigate to your business details
3. Look for "reference amount" or "reference data balances"
4. This figure is your baseline for all delinked payment calculations

Important limitations

• Cannot be changed: Reference amounts are fixed based on 2020-2022 BPS claims
• Cannot be transferred: The transfer window closed on 10 May 2024
• Inheritance exception: Reference amounts can transfer with land on death until 2027
• No appeal: If you believe your reference amount is incorrect, there is no formal appeal process, though you can contact the RPA

What you need to do for delinked payments

For the payments themselves: nothing. If you received BPS historically, delinked payments are calculated and paid automatically.

You do NOT need to:

• Submit an annual claim or application
• Maintain land in agricultural condition
• Meet cross-compliance standards (for these payments specifically)
• Own or rent any farmland
• Continue farming at all

Keep your Rural Payments details up to date

While you do not need to actively claim, you must keep your Rural Payments account accurate. Update the following if anything changes:

• Bank account details: Now can be updated online through the Rural Payments service
• Business name and address: Particularly important if you have changed legal structure
• Contact information: So the RPA can reach you about payments

Payment timing

From 2025, delinked payments are made as a single instalment from 1 August each year. This is a change from 2024, when payments were split into two instalments (50% from August, balance from December).

Planning for income replacement

The critical action is not about delinked payments - it is about what replaces them. With payments reducing to near zero, farmers need alternative income streams.

The government's stated policy is to redirect the money previously spent on BPS towards:

• Environmental Land Management (ELM) schemes
• Productivity and innovation grants
• Animal health and welfare support
• Nature recovery projects

The announced funding for 2026-2029 shows where the money is going:

The £2 billion going to ELM schemes by 2028/29 represents the redirected BPS money - but accessing it requires joining environmental schemes.

Alternative funding: Environmental Land Management schemes

The main replacement for BPS income is the Environmental Land Management suite of schemes. These pay for delivering environmental outcomes rather than simply owning farmland.

Sustainable Farming Incentive - reformed SFI 2026

SFI was the flagship scheme designed as a straightforward entry point to environmental land management. It closed to new applications on 11 March 2025. The reformed SFI 2026 offer was announced on 8 January 2026: the first application window opens on 30 June 2026 (for small farms of 50 hectares or less and/or farmers without an existing ELM revenue agreement, with a minimum of 3 hectares), and a second window opens in September 2026 for all farmers.

When SFI applications open, consider it if:

• You want flexibility - 3-year agreements are shorter than Countryside Stewardship
• You want to start small - the minimum is 3 hectares of eligible land
• Your land is not in a designated site (SSSIs typically need Higher Tier CS)
• You want to combine environmental actions across your whole farm

Note: The reformed SFI 2026 scheme differs from the previous version: it offers 71 actions, with a £100,000 cap per agreement year and one agreement per business. Some 2024 actions and rates have been removed or changed.

Countryside Stewardship - available now

Until the SFI 2026 application windows open (30 June 2026 and September 2026), Countryside Stewardship Higher Tier is the main route for new environmental agreements.

Consider Countryside Stewardship if:

• You need to start an agreement now rather than waiting for SFI
• You have designated sites (SSSIs, commons) requiring specialist management
• You need capital grants for fencing, water infrastructure, or hedgerow planting
• You can commit to 5-10 year agreements
• You have specific habitat types needing detailed management prescriptions

Other funding options

Farming Investment Fund

Capital grants for equipment, technology, and infrastructure to improve productivity:

• Farming Equipment and Technology Fund: up to £25,000 per theme (up to £75,000 across the three themes) at 50% grant rate; the 2026 round closed on 12 May 2026
• Slurry Infrastructure Grant: £25,000-£250,000 at 50% grant rate
• Water Management Grant: For irrigation and water storage

Financial planning through the transition

Managing cash flow during this transition requires careful planning. The scale of income loss - potentially from tens of thousands of pounds to £600 - demands serious business review.

Model your income scenarios

1. Calculate your remaining delinked payments:
   • 2025: Your reference amount × 24% (capped at £7,200)
   • 2026-2027: Your reference amount × 2% (capped at £600)
   • 2028 onwards: £0
2. Estimate potential ELM income:
   • Review which SFI actions or CS options suit your farm
   • Calculate potential payments per hectare
   • Be realistic about uptake - not all land will suit all options
3. Identify the gap:
   • Compare historical BPS + new scheme income with costs
   • Factor in inflation on costs (fertiliser, fuel, labour)
4. Plan to bridge shortfalls:
   • Cost reduction opportunities
   • Diversification income
   • Productivity improvements
   • Or exit strategies if the business is no longer viable

Review your cost base

BPS payments historically supported land rents and input costs. As payments reduce:

• Renegotiate tenancy agreements: Farm rents may need to reflect the new subsidy reality
• Review input costs: Identify efficiency savings in fertiliser, feed, fuel
• Assess farming system viability: Some enterprises may no longer work without subsidies
• Consider machinery costs: Contract farming or machinery sharing may reduce overheads

Take professional advice

The scale of change justifies professional support:

• Agricultural consultants: Can model different scenarios and advise on scheme applications
• Accountants: Tax planning as income sources change
• Land agents: Reviewing tenancy terms and land values
• Farm business advisers: Benchmarking performance and identifying improvement areas

Diversification options

With direct payments ending, many farms are considering diversification to replace lost income. Options include:

• Farm shops and direct sales: Selling produce directly to consumers
• Tourism: Holiday lets, camping, glamping, farm stays
• Events: Weddings, corporate events, educational visits
• Renewable energy: Solar, wind, anaerobic digestion
• Equestrian: Livery, riding schools, horse events
• Contract services: Using machinery and skills for other farms or businesses

Each diversification route has its own regulatory requirements. See our specific guides on farm diversification compliance.

Key dates and timeline

Mental health and wellbeing support

The farming community has faced significant pressure during this transition. Financial uncertainty, changing regulations, and the loss of traditional support systems can affect mental health.

Support is available from:

• Farming Community Network: 03000 111 999 (7am-11pm daily)
• RABI (Royal Agricultural Benevolent Institution): 0800 188 4444
• Yellow Wellies (Farm Safety Foundation): www.yellowwellies.org
• Samaritans: 116 123 (24 hours)

If you are struggling with the transition, please reach out. These organisations understand farming and the unique pressures you face.