The income of Citizens Advice dropped by £9.5m in its most recent financial year, according to documents filed recently.
The latest report and accounts for the charity - the umbrella body for local Citizens Advice Bureaux - say the drop in income in the year to March 2017 was expected and is due in part to a reduction in funding from the Department for Work and Pensions (DWP).
DWP reduced its restricted funding for the charity to produce pensions guidance by £4.7m, down from £13.8m in 2015/16 to £9.1m in 2016/17, due to a change in anticipated demand.
During the year, the charity increased its overall pension deficit by £7m and therefore agreed to increase annual payments to fund the scheme.
Its deficit reduction contribution in 2016/17 was £1.61m, but this was set to increase to £1.75m from 1 July 2017.
It says this increase is primarily driven by decreasing mortality rates and “underlying economic factors including the sustained period of low gilt rates”.
The charity also reviewed its reserves policy, raising its minimum level of unrestricted funds from £6m to £8m, due to an increase in its assessment of three months’ operating expenditure.
Its current level of unrestricted reserves, meanwhile, remains well above this mark at £16.2m, up from £12.0m the previous year. The report says £5.3m of this is designated for planned investment in technology and digital products.
The charity says it has begun work on a new strategy to help make it more sustainable in an “extremely challenging” financial environment, part of which is likely to be a continued focus on diversifying its income streams.
The introduction to the report says: “The economic environment remains extremely challenging and financial risks and uncertainties therefore continue to be a significant focus. Citizens Advice is heavily dependent on public sector derived funding both for our core operations and our wider services.”
Further down in the report it adds: “Income sustainability continues to be a key risk for both Citizens Advice and the network and this is unlikely to change in the current climate of economic and political uncertainty.
“We are also operating in a highly competitive environment with ongoing pressures on public funding. In line with our current and longer term planning, we will continue to diversify our funding sources and invest to support local Citizens Advice secure new, sustainable sources of income.”
Citizens Advice currently receives £64.8m in government grants, the larger proportion of which is from the Department for Business, Energy and Industrial Strategy, which paid the charity £22.3m in unrestricted funds and £16.1m in restricted funds in 2016/17, similar levels to the previous year.