Age UK made 400 staff redundant last year, as part of efforts to deal with the financial impact of Covid-19.
Writing in its annual accounts for March 2020-21, which were published last month, the charity said that losing so many staff was “a decision we wish we could have avoided”.
The majority of redundancies came from the charity’s retail staff. The accounts show that Age UK made an operating loss of nearly £18m from its trading arm after its network of shops were forced to shut for several months during pandemic restrictions.
The charity’s income was £127.1m before investments, slightly down on 2019-20, while total spending dropped around 8% to £125.1m.
The accounts show that the charity ended the year with 1,645 staff, measured by monthly headcount, down from 1,924. Some 330 of the redundancies made during the year were based in Age UK’s trading division.
The report said: “The enforced closure of our network of almost 400 shops saw us lose £800,000 in income each week at start of the pandemic.
“We took quick action to reduce our costs and benefited greatly from the government’s Job Retention [furlough] scheme to protect jobs but had no choice but to make over 400 colleagues redundant.
“This was difficult, and a decision we wish we could have avoided.”
The charity raised around £9m from the furlough scheme. Spending on redundancies across the whole Age UK group doubled compared with 2019-20, from £1.4m to £2.8m.
The accounts state that the executive team “agreed to take a temporary six month pay cut of at least 15%” at the beginning of the Covid-19 crisis.
Income, spending, distribution
Total income at Age UK in 2020-21 was £127.1m, compared with £131.3m the year before, while spending fell from £136.5m to £125.1m.
With an additional £7.5m from investment income, the charity recorded a surplus of over £9m.
Gross fundraising income rose sharply from £68m to £87m, largely driven by an emergency appeal at the start of the Covid-19 crisis which brought in £11.5m.
Much of that additional income was then spent to support Age UK’s network of frontline partners and community groups across the UK. The money distributed to the network rose from £11.6m to £20.5m.
The accounts show that Age UK cut spending on campaign and research work from £14.1m to £11.1m.
Age UK held £31.9m in free reserves at the end of 2020-21, up from £28.3m.
The charity has changed its reserves policy to reflect “lower levels of expenditure”. It now aims to maintain reserves at between £30m and £40m, having reduced the upper target from £50m.
Age UK started its search for a new chief executive this month, after Steph Harland departed from her role in 2021.
Writing collectively in the introduction to the annual report, the charity's trustees said that they anticipated demands on the charity to rise.
They said: “We have risen to the challenge and will rise further. We know that the pandemic and its adverse impact on older people are far from over.
“While this year is the pandemic year, its consequences will be felt very deeply for years, if not decades to come.”