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The number of UK charities that have been forced to shut their doors for good has jumped by 74 per cent this year, with the rising cost of living, stalling donations and the increase in employers’ national insurance all blamed for the shocking rise.
The sector has raised fears that people in need will be left without vital support, with Oxfam warning that charities are being “asked to do more with less, at the very moment people need us most”.
There are also concerns that the government’s Employment Rights Bill, which would require charities to guarantee hours for zero-hours staff and pay compensation for cancelled shifts, could further strain charities’ budgets, driving more insolvencies.
Oxfam, which in April said it took the “difficult decision” to put 265 of its 2,100 staff at risk of redundancy, has now warned that charities are being “asked to do more with less, at the very moment people need us most”.
The number of major UK charities, defined as those that recorded revenues of over £50k, shutting down jumped to 151 in 2024/25, up from 87 in 2023/24, according to charity commission data analysed by chartered accountants and business advisors Lubbock Fine.
The firm said the increase in insolvencies reflects a “triple hit” of rising employment costs, stalling donations and reduced government funding.
The surge in closures comes as demand for services such as food banks and counselling programmes is rising, leaving more vulnerable people without essential support.
Earlier this year, Macmillan Cancer Support announced it had axed a quarter of its staff, downgraded its helpline and scrapped its flagship financial hardship scheme that provided millions of pounds in grants to thousands of patients.
Data from the Charities Aid Foundation indicated that there are four million fewer individual donors since 2019, while cash donations from British businesses have fallen by around £300 million this year compared to last, equating to around 5,455 small charities going unfunded.
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A spokesperson for Oxfam told The Independent: “Communities across the world are facing unprecedented levels of need, from conflict to climate change to rising inequality. Charities are being asked to do more with less, at the very moment people need us most.
“Rising living costs and higher National Insurance contributions are adding to the strain, and future cuts to UK aid risk deepening this crisis, stripping away vital lifelines for those living in poverty.
“Aid is a smart investment in stability, security and opportunity for all of us. At a time of growing global challenges, the UK should be looking to strengthen its support for civil society, not scale it back.”
Hazra Patel, partner specialising in charities at Lubbock Fine, told The Independent: “Charities in the UK are facing a growing burden of costs, leaving many with no option but to shut their doors.
“This is an alarming trend, as it leaves people in need without the vital support that charities once provided.”
Pointing to higher employers’ National Insurance Contributions, she added: “Employment costs are rising on multiple fronts, forcing charities to cut back staff and scale down operations just to survive.
“Rising costs and stalling donations are hurting charities deeply, and government policy is offering little support. Many in the sector fear they will be forced to scale back or close altogether.”
In May, the Trussell Trust revealed a stark increase in the number of emergency food parcels distributed across the UK, with a 51 per cent rise recorded over the past five years.
The charity delivered nearly 2.9 million emergency food parcels in the year to March 2025, a significant jump from the 1.9 million distributed in the year to March 2020. This surge has prompted urgent calls for government intervention and a reassessment of welfare reform policies.
