Age UK is furloughing over 1,200 of its staff with immediate effect, this amounts to approximately 70% of its workforce.
The majority, 1,100, are from its retail division following the closure of its almost 400 shops, with the remainder working in non-public facing roles within the charity.
The government's Coronavirus Job Retention Scheme allows employers to claim for 80% of furloughed employees’ usual monthly wage costs, up to £2,500. Age UK will be topping up the remaining 20% of salaries.
A statement from the charity says it has taken this decision with “regret” but as a “necessary step” in order to cut its costs following a loss of income as a result of the Covid-19 pandemic.
All income from Age UK's charity shops has stopped and other income streams are being hit, including fundraising events such as the London Marathon.
The charity has said demand for its services “is going through the roof” as many older people are approaching the charity for help during the pandemic.
'We are facing a perfect storm'
Age UK has launched a coronavirus emergency appeal, to help it meet the growing number of calls to its Advice Line and meet rising demand for friendship calls from older people.
Steph Harland, chief executive of Age UK, said: “The coronavirus is an enormous threat to older people and at Age UK we are determined to step up to help. I am so proud of everything we are doing already to support our older population through this crisis and as our appeal gathers momentum I hope we will be able to do even more. However, as a charity we are facing a perfect storm: older people need us like never before, but our finances have been turned upside down by the lock down imposed to control the spread of the virus.
“We don't dispute for a minute the need for such drastic action from the government but ministers do need to understand the enormous impact it is having on charity finances and give us some additional help.
“Age UK is by no means alone in this, many other charities have been hit hard financially too. But the tragedy is that just when we should be focusing 110% on helping older people we are being diverted by the need to manage our way through these treacherous financial waters.
“No one could reasonably have foreseen how some of the mainstays of charitable income have simply been washed away overnight, nor put in place plans to fully mitigate them. That's why I hope the government will listen to the umbrella bodies representing charities and create the stabilisation fund they are calling for. This would not only make a big difference to charities but to the people and communities we serve too."
Updated advice on furloughed employees volunteering
The government updated its guidance on furloughing over the weekend. A furloughed employee can take part in volunteer work, if it does not provide services to or generate revenue for, or on behalf of your organisation.
An organisation can agree to find furloughed employees new work or volunteering opportunities while on furlough if this is in line with public health guidance, but cannot force people to volunteer.
When employees are on furlough an organisation cannot ask its employee to do any work that makes money for the organisation or provides services for the organisation, but employees can take part in volunteer work or training.