There was a time, many years ago, when the Chancellor would announce the UK Budget and, except for a few in the inner fiscal circle, it genuinely came as news to everyone hearing it.

Today, however, the days leading up to the statement are dominated by leaks and well-informed speculation. This year, there seemed to be more possible outcomes than usual, which perhaps added to the sense of surprise when the final announcement proved less dramatic than expected, with many measures pushed several years into the future.

Now that the dust is settling, what might this Budget mean for UK charities and their funders?

One of the most significant measures is the continued freeze on income-tax and National Insurance thresholds through to 2030–31. As wages rise with inflation, m more people will be pulled into tax and subject to the higher tax bands. For many households, that will mean reduced disposable income and less scope for discretionary spending, including charitable giving. Charities that depend on smaller, regular donations may feel this particularly acutely.

At the same time, demand for charity services is unlikely to ease. Although the increase to the National Living Wage and the lifting of the two-child benefit cap will support some families, ongoing cost-of-living pressures and tight public finances mean many people will continue turning to charities for help.

Charities also face their own fiscal pressures. Rising delivery costs remain a challenge, and for organisations with staff on lower pay bands, the National Living Wage increase will add further pressure on salary budgets, especially following the National Insurance changes made in April 2025.

Taken together – rising demand, constrained income, and higher operating costs – the Budget offers little in the way of short-term relief or reassurance for much of the sector.

So, what should charities do now?

The backdrop is undeniably tough, but there are constructive steps charities can take.

A positive development in the Budget is the new VAT relief on business donations of goods to charities. This allows businesses to donate stock or resources for charitable distribution or service delivery without incurring VAT. For some charities, this could encourage an increase in in-kind corporate support.

Now is also a good moment for strategic reflection. With SORP 2026 changes approaching, organisations have an opportunity to revisit long-term sustainability, financial planning and operating models.

Finding the space to pause and reflect, however, can be difficult when day-to-day pressures dominate. This is where Sayer Vincent can add value. Our independent perspective, paired with deep sector experience, helps organisations navigate fiscal shifts with clarity and confidence.

While the 2025 Budget undoubtedly presents challenges, it also underscores the importance of planning, adaptability and sound decision-making. With thoughtful strategy and the right support, charities can emerge more resilient, more focused, and better positioned to continue delivering vital impact. At Sayer Vincent, we’re here to help organisations turn uncertainty into opportunity and chart a sustainable course through whatever comes next.