UK charities are grappling with rising operational costs due to increased National Insurance Contributions and National Minimum Wage, forcing them to reduce services or freeze expansion plans. This comes as charities already navigate tight budgets, where higher staff costs directly impact their ability to provide essential support. For instance, a care home had to halt new resident facility investments, and another charity lost £20,000 that could have helped individuals in debt. Local authorities often don't cover these increased costs, creating funding gaps that jeopardize vital services.
Vulnerable beneficiaries are being left without essential support as charities across the UK are forced to scale back services or halt expansion plans due to surging operational costs.
The effective rate of NIC that charities must pay has risen to 18% for many, eating into budgets and hindering their ability to support vulnerable individuals.
Charities paying the London or National Living Wage are particularly affected, with funding gaps emerging from local authorities refusing to cover increased staffing costs.
The London Marathon raised £73 million in 2024, but would have needed an extra £2.2 million just to offset increased NIC costs.
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