The Autumn Budget sets the tone for the economic and policy environment that charities will face over the coming years. In this recording of the Rathbones Charity Expert Series webinar, we explore what the Chancellor’s announcement in November 2025 means for the sector - looking not only at the immediate impact but also at the financial and operational implications for 2026 and beyond.
Article last updated 28 November 2025.
Charity Finance Group (CFG): A mixed bag of modest wins
Sarah Lomax, Co-CEO of CFG, described the Budget as “a real mixed bag.” The group welcomed the introduction of VAT relief on business donations of goods, calling it “a definite win” that could encourage more corporate giving. However, CFG expressed concern over rising employment costs, particularly the National Minimum and Living Wage increases, without corresponding funding support. The upcoming £2,000 cap on pension contributions via salary sacrifice also raised questions about long-term viability for employers. CFG is urging charities to participate in its survey on the impact of these changes.
Read CFG’s full response here.
NCVO: Limited relief amid mounting pressures
The National Council for Voluntary Organisations highlighted the removal of the two-child benefit cap and new investment in children’s social care as positive steps that could ease demand on frontline services. However, NCVO warned that charities will continue to face “difficult decisions about staffing, services and sustainability” due to frozen tax thresholds and rising wage bills. The sector employs nearly a million people, making these cost pressures particularly acute.
Read NCVO’s full response here.
SCVO: Calls for fair funding and wage parity
SCVO has voiced concerns about the late timing of the Autumn Budget, arguing that it leaves the Scottish Government with little opportunity to adjust its own spending plans. This delay, they say, creates uncertainty and undermines efforts to provide stability for charities and voluntary organisations across Scotland. While SCVO welcomed the UK Government’s commitment to increasing wages, it warned that without full funding for contracts and grants, charities will struggle to meet Fair Work standards and achieve pay parity with the public sector. The organisation also highlighted the potential negative impact of proposed changes to salary sacrifice schemes, particularly the cap on pension contributions, which could affect staff benefits and recruitment. SCVO concluded by urging both the UK and Scottish Governments to engage meaningfully with the voluntary sector to ensure that policy changes do not compromise service delivery or organisational sustainability, stressing that fair funding and long-term investment are essential for charities to continue supporting communities effectively.
Read SCVO’s full response here.
The Budget 2025 offers some relief—such as VAT relief on business donations and the removal of the two-child benefit cap—but fails to address the structural funding challenges charities face. Rising wage bills, frozen tax thresholds, and pension changes will continue to strain resources. Industry bodies are united in calling for fair funding, parity with public sector pay, and meaningful engagement with policymakers to ensure charities can sustain vital services in an increasingly complex economic environment.
