Ryan FowlerAge UK has warned that the government’s decision to raise employer National Insurance Contributions (NICs) from 13.8% to 15% in April 2025 will force some essential services for older people to close, with many local Age UK charities struggling to absorb the additional costs.
The charity’s report, Nothing Left to Trim, based on a survey of 69 local Age UK organisations, estimates that the budget measures will add £6.27m in costs across responding organisations this year. Seven in ten said they will be forced to reduce services, while half indicated they may need to cut contracts with local councils or NHS bodies.
Paul Farmer, chief executive of Age UK, said: “At a time when the Government is saying it wants to work more closely with charities, and when the public demand for our services is higher than it has ever been before, it’s deeply frustrating that the changes to Employer NICs in the Budget are undermining our ability to support vulnerable older people and their families and communities.”
“If we were truly acting in response to the needs we see, we would be opening many more services, especially in areas with high levels of deprivation and demand. Instead, the reality is that many local Age UKs are worried about sustaining their existing provision, and are planning to retrench and, in some cases, close altogether forms of help that are highly valued by the older people who use them.”
The NICs increase, along with rising costs linked to the National Living Wage, will have a significant impact on charities, which typically employ large numbers of lower-paid staff. The consequences, Age UK warns, will be severe, particularly as public sector services have already been cut back in recent years, leaving many communities reliant on voluntary sector support.
Some local Age UK branches have already begun scaling back their services. Age UK Bromley and Greenwich said: “We have decided to close some services we were subsidising.” Age UK Oldham added: “As the local ICB is facing financial challenges and already reducing contracts to the voluntary sector, we do not expect that they will offer increases to cover the additional NI costs on contracted services.”
In response, Age UK is calling on the government to provide financial support to local charities through either an exemption from the employer NICs increase or additional funding to local councils and NHS contracts to help charities meet rising costs.
“The Government has provided extra funding to local councils and to the NHS in recognition of the impact of the changes to Employer NICs, but it has so far chosen not to compensate charities that work closely with them to deliver vital services, in the same way,” said Farmer. “It seems utterly self-defeating to allow effective voluntary sector-run services to wither and die when they contribute so much to achieving the Government’s NHS and social care goals.”
Age UK warns that if local services close, older people will be left without vital support, leading to greater demand on already stretched NHS and social care services. “If this is to carry on year on year, it’s difficult to see how survival for any charity is possible,” said Age Cymru Gwent. “What will happen to older people as more and more Age UK charities fall by the wayside, I dread to think.”
