Penny Appeal’s workforce fell by nearly 40% last year due to the UK-based Islamic charity recording “lower income”, its newly published report says.
Released this week, the charity’s 2025 annual report shows it employed an average of 40 people during the year ending 31 December 2025, down from 66 in 2024, while its total staff costs fell by 32.9% to £1.89m.
Income fell 16% over the same period, with the report saying: “While these changes were made in response to [that reduction], they’ve also brought lasting improvements to the way we work.”
Penny Appeal’s report reveals that it spent almost £85,000 on redundancy costs over two years, with £14,879 recorded for the year ending 31 December 2025 and £68,987 for the previous 12 months.
The latter figure had not previously been disclosed in the charity’s 2024 annual report.
Workforce reduction ‘reflects natural attrition’
The Charity Commission opened a compliance case into Penny Appeal last year after a whistleblower raised financial and governance concerns.
In July 2025, the whistleblower told Civil Society that staff and trustees deemed disloyal had been removed and that over 30 employees had been made redundant.
At the time, Penny Appeal said there were no planned redundancies, a statement it has stood by.
This week, a spokesperson said the charity “confirms that there have been no redundancies” during the 2025 reporting period.
They told Civil Society that the spending on redundancies in the most recent report relates entirely to the 2024 accounting year but that “some of the 2024 redundancy-related payments were made in January 2025”.
“The reduction in reported workforce numbers from 66 to 40 reflects natural attrition over the period, with staff resignations and roles not being backfilled as part of ongoing operational review” due to falling income, they said.
The spokesperson said the report’s wording around changes being made refers to the decision not to fill roles as people left naturally.
“Our statement last year was accurate at the time – there were no planned redundancies and none have been implemented since,” they added. “We remain committed to our staff and to delivering our charitable objectives, and we keep staffing and operational needs under regular review.”
Civil Society has asked for further clarification on the number of roles made redundant at Penny Appeal during 2024. Its annual report for that year does not record an average number of employees, but shows that staff wages and salaries rose slightly to £2.52m, from £2.33m in 2023.
Drop in total income and expenditure
Penny Appeal recorded total income of £10.9m last year, a 16% drop from the £13.1m recorded in 2024.
The report says “giving across the sector has remained under pressure as households continue to manage higher living costs and, as a charity funded entirely by the public, we have felt this too”.
It shows that while restricted donations remained resilient at £8.70m (2024: £9.33m), unrestricted donations decreased to £1.42m (2024: £3.18m).
“With this in mind, we’ve kept a firm focus on sound governance and prudent financial management, supported by our reserves policy and going concern review,” the report reads.
Penny Appeal also broadened its sources of income last year, with “other income” rising by 28.5% to £810,053 (2024: £630,552), comprising rental income of £413,806 and other sales of £396,248.
Overall, it recorded a surplus of £1.59m in 2025, compared with a deficit of £619,645 the previous year.
This improvement follows the “careful cost management put in place over the past two years”, with total expenditure falling by 31.8% to £9.38m (2024: £13.8m), “ahead of the fall in income”, the report says.
The charity spent nearly £4m less on charitable activities, with expenditure in that area amounting to £6.45m in 2024-25.
The report says “this reflects lower income as well as the timing of programme delivery”, with restricted funds carried forward increasing to £1.77m (2024: £303,055), all of which are committed to the charity’s programme areas.
“Taking charitable expenditure and these restricted funds together, 74.9% of the income received in the year has been spent on, or committed to, our charitable objectives,” it says.
“Our fundraising has continued to become more efficient, with expenditure on raising funds of £2,932,401 in 2025 compared with £3,496,243 in 2024, a reduction of 16.1%.”
