Nothing Left to Tim

Increased employer NICs on charities will wipe out some essential services for vulnerable older people  

Age UK’s report ‘Nothing left to trim’ – shows the Government’s Budget measures will cost the 69 local Age UKs who responded to a survey from the national charity £6.27 million this year  

Age UK calls on the Government to make more financial help available to local charities of all kinds, so that they can continue to provide vital support to their communities    

Some essential Age UK services which help highly vulnerable older people, and their families and unpaid carers, will be forced to scale down or close as a result of the Government’s decision to increase Employer NICs (from 13.8% to 15% in April 2025) and to lower the salary threshold at which they become due.  

This is the stark conclusion of Age UK’s new report ‘Nothing left to trim’ which sets out the findings of its recent survey of local Age UKs and National local Partners[i]In total Age UK received 69 responses to their survey giving a creditable response rate of more than 50%. Through their replies many made it clear that as a result of their increased costs brought about by the Budget, they will have to let go some staff; increase the charges levied on older people who pay for their own services; and ultimately close some services, if they can no longer see how to make them viable, given their increased cost base. Sadly, for a few, their survival as local charities was also at risk.  

The 69 local Age UKsi which responded to Age UK’s survey said that the increase in their costs brought about by the Budget would have the following impacts:  

• £6.27m total additional financial cost annually[ii] 
• 7 in 10 respondents indicated that that these changes will decrease their ability to deliver services to older people 
• 7 in 10 respondents said that the changes mean they are needing to consider reductions in staffing 
• 5 in 10 said they are now having to consider cutting services or handing back contracts to the NHS body or their local council that commissioned them, because they are no longer able to afford to deliver them on the terms agreed before the Budget was announced.

 The Government’s decision to increase Employer NICs and lower the salary threshold at which these start to be paid inevitably hits employers of relatively large numbers of low paid staff particularly hard. Unfortunately, this is a good definition of the situation in many charities, meaning that the charity sector as a whole is being seriously impacted by the changes, far beyond Age UK.  

The knock-on consequences of this could be severe for individuals and for communities, given that statutory services have diminished in recent years, meaning that in many cases a voluntary sector-run service is all that is left. If this also has to close there will often be no alternative to go to instead. In addition, the voluntary sector itself has been struggling to keep going over the last few years, many organisations having been battered firstly by the pandemic, then by the cost of living crisis. And this against a context of austerity in the public sector, which has often resulted in less financial support for charities from local authorities, as they too struggle to make ends meet. Meanwhile, these events have also, in many cases, increased the demands on charities from local people who are desperately in need of practical and emotional help – a really difficult situation for charities to navigate, small local ones especially.  

Age UK is also worried that if local Age UK’s are forced to raise the prices for some of their services then they could become unaffordable for older people in need who are living on modest incomes. In these circumstances there is a risk that some older people simply stop using a service, like help at home, and become less able to live independently as a result. This would be a sad outcome for any older person affected and bad news for the State too, since it makes it more likely that the demands on already hard-pressed NHS and social care services will rise.  

Against this challenging backdrop the Charity is calling for more financial help to be made available to local charities of all kinds so they can continue to provide vital support - in the case of local Age UKs to older people and their families and unpaid carers. This financial help could be provided directly (e.g. via an exemption for local charities from the Employer NICs changes); or indirectly, for example through additional dedicated funding made available to councils in the final local government finance settlement, or through some NHS funding being set aside to meet the additional costs of its contracts with the VCSFE.  

Local Age UKs provide vital and life-enhancing services to older people, including social care and home help type support; discharge support for older people leaving hospital; help claiming benefit entitlements; befriending services to combat loneliness; social activities; exercise classes; and free information and advice. These brilliant local charities support many thousands of older people and their families each year, helping them to stay well and independent for as long as possible, usually in their own homes. As a result, they save money for both the NHS and local councils, by preventing or delaying older people’s need for formal health and social care services.  

Like many charities, local Age UKs are often funded by local authorities and the NHS to deliver services in their areas. These services have been at increasing risk as more councils issue Section 114 notices indicating severe financial distress, and NHS budgets tighten. In addition, while Age UK supports the Government’s decision to increase the National Living Wage to help low paid staff, this is another cost that local Age UKs must now meet at the same time as weathering the changes to Employer NICs. The combination of all these increased charges coming together is simply too much for some local charities, whose resilience has already been weakened by the events of recent years.  

Despite these challenges, local Age UKs, and charities more generally, remain strongly committed to their beneficiaries and communities. However, this unwavering commitment has stretched their resources thin and has brought some close to or beyond collapse – several local Age UKs were forced to close for financial reasons during 2024, a situation replicated in other parts of the VSCFE too.  

Age UK is calling for the Government to make more financial help available to local charities so that they can continue to provide vital support within their communities:   

• This financial help could be provided directly via an exemption from the Employer NICs changes for local charities 
• And/or it could be provided indirectly, through additional dedicated funding made available to councils in the Final Local Government Financial Settlement, to be announced soon 
• And for those local charities that work closely with the NHS, like many local Age UKs, some NHS funding could be set aside to ensure they receive an uplift to compensate them for the additional costs they now face on contracts that were negotiated before the Budget changes were announced. 

Paul Farmer CBE, Chief Executive of Age UK said:  

“At a time when the Government is saying it wants to work more closely with charities, and when the public demand for our services is higher than it has ever been before, it’s deeply frustrating that the changes to Employer NICs in the Budget are undermining our ability to support vulnerable older people and their families and communities.  

“If we were truly acting in response to the needs we see we would be opening many more services, especially in areas with high levels of deprivation and demand. Instead, the reality is that many local Age UKs are worried about sustaining their existing provision, and are planning to retrench and, in some cases, close altogether forms of help that are highly valued by the older people who use them.  

“As one local Age UK leader said to me recently, ‘we only just survived the pandemic, then the cost of living crisis, so it’s terrible to be hit by this surge in costs now, just when we thought there was light at the end of the tunnel and brighter times lay ahead.’”  

“The Government has provided extra funding to local councils, and to the NHS, in recognition of the impact of the changes to Employer NICs, but it has so far chosen not to compensate charities that work closely with them to deliver vital services, in the same way. Of course, we understand that the public finances are under severe stress, but it seems utterly self-defeating to allow effective voluntary sector run services to wither and die, when they contribute so much to achieving the Government’s NHS and social care goals, among others. And make no mistake, once a local charity closes there’s no quick or easy coming back.”  

“That’s why we sincerely hope that Ministers will look at reports like this one about the - no doubt unintended - consequences of its Budget changes to Employer NICs for the viability of local charities and take action to help organisations and services to survive. The fact is that very few local VCSFE organisations are in a position to withstand increased costs on the scale they are now facing, and the consequences for local people and communities will be severe.”  

Amy Whyte, Chief Executive of Age UK Northumberland said: 

"As a charity supporting older people, this change could not have come at a worse time.  Demand for our services is at an all-time high, as older people across the country are struggling to meet the cost of living since the recent changes to Winter Fuel Payments and increased living costs. We urge Government Ministers to consider the impact that the planned changes to Employer NICs will have on charities such as ourselves, and the inevitable additional costs and pressures that reduced investment in services will place on our NHS.” 

Some quotes from Local Age UK Partners  

Age UK Lincoln and South Lincolnshire: “…we will have to reduce our service offer and seriously consider if we can continue to deliver contracted services without realistic uplifts.”      

Age UK Oldham: “…as the local ICB is facing financial challenges and already reducing contracts to the voluntary sector we do not expect that they will offer increases to cover the additional NI costs on contracted services...there has been no parity extended to charities who also deliver social care.”       

Age UK Wirral “We are faced with making some radical decisions about our future.”    

Age UK Bromley and Greenwich: “we have decided to close some services we were subsidising” Age Cymru Gwent: “If this is to carry on year on year it’s difficult to see how survival for any charity is possible. What will happen to older people as more and more Age UK charities fall by the wayside, I dread to think.”  

Notes: [i] There are 112 local Age UKs currently operating in England who received the survey, which was also sent to 5 local Partners in Wales, 1 Local Partner in Scotland, Age Cymru, Age Scotland and Age NI. The 69 respondents came from Local Age UKs and included Partners in Wales and Scotland. [ii] 63 of the respondents to the survey provided financial information. Overall impact of the rise in Employer NICs This rise is a problem throughout the charity sector – with many organisations including Marie Curie, St Mungos and Crisis all warning about the impact on services.   The estimated total increased cost of employer NICs to the charity sector is £1.4bn a year.1 This very large cost - along with the compounding challenges faced by charities - will mean that very difficult decisions regarding service delivery may have to be made, quite possibly deepening inequality of access. Ref : NCVO