Age UK’s trading income dropped by nearly £10m last year, according to data in the charity’s recently filed annual accounts.
The charity’s income from trading activities was £13.4m in 2017/2018, down from £23.2m in the 12 months before.
The accounts, published earlier this month, also show that the charity’s net income overall fell from £73.1m to £67.6m over the same period. The report says that this drop “has been driven by a significant fall in in the unrestricted income made by Age UK’s trading subsidiaries.”
Age UK has significantly restructured its trading activities in recent years, following allegations in the press in 2015 that it had promoted expensive energy schemes provided by businesses which also gave money to the charity.
A Charity Commission compliance case on the issue, which was published in 2016, warned that involvement in the energy market posed a “significant risk” to the charity.
Rebrand of trading acitivity
Since April 2018, Age UK’s trading activities have been rebranded as Age Co, as part of attempts to make a clearer distinction between its charitable work and the commercial products sold by its trading companies. The accounts say that the “rebrand had been planned for some time” but that these plans were “accelerated” by the Commission’s report.
Age Co pledges to ensure that all the products it offers, which include funeral plans and insurance, are “good for older people, offered at a price that is fair and appropriate, and generate a profit that’s reasonable and acceptable.”
Money raised through the sale of Age Co products will then be donated to Age UK, to fund its charitable work. The company estimates that it will donate £3 million in 2019.
The annual accounts state that the reforms are already making “a significant difference” to how Age UK operates. It confirms that the charity has lost income as the result of decisions to renegotiate its contract with a major private insurer and to end another contract with a company producing hearing aids.
‘Tough market conditions’
An Age UK spokesperson said: “Our strategy is changing and we have withdrawn from some areas of trading while investing in others, particularly our charity shops. Market conditions for funeral plans and insurance, areas in which Age UK Enterprises has been involved for many years, are also tough.
The spokesperson said that the Charity Commission’s recommendations “certainly gave us a lot to think about” and added that, “led by our board of trustees, we have worked hard on clarifying our approach to trading, its governance, and the principles that underpin it.
“This work is proving to be hugely valuable and is strengthening us as a charity, but it would not be accurate to say that it is responsible for the fall in our trading income set out in our report.”
The annual accounts also confirm that the Information Commissioners Office has decided not to take any further action after Age UK referred itself to the ICO in December 2017. The charity acted after discovering that it had lost the personal details of current and former employees in two separate incidents, including the names, addresses, dates of birth and national insurance numbers of staff.
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