Survey insights from WRS Insurance Brokers

With the April 2026 National Minimum Wage increase now in effect, Charity Insurance specialists, WRS Insurance Brokers, surveyed charities across the UK to understand how prepared the sector is for the increased costs and what the financial impact could have for staffing, services and long-term sustainability.

The responses* demonstrated strong awareness of the changes, but also highlight growing concerns about how charities will manage rising payroll costs, alongside already stretched budgets.

The majority of respondents were smaller organisations, with 82% reporting annual turnover under £500,000, around 5% between £500,000 and £1m, and just over 13% reporting turnover above £2m.

Charities taking part supported a wide range of causes, including community projects, health and medical research, disability support, children and young people, animal welfare and faith-based organisations.

Most are informed, but financial planning varies

More than 9 in 10 charities were aware the new rates would come into force from 1st April 2026. However, while many charities have planned ahead, others are still working through the financial implications.

Around half (53%) said the increase has been fully factored into their 2026/27 budgets, while others said it has only been partially included or not at all.

One charity explained that even when the increase is expected, funding does not always keep pace.

“We budget for annual wage increases, but grants and giving are not keeping up with rising costs, so we still have to make difficult decisions.”

Others reiterated this lack of flexibility in already tight budgets:

“We have factored it in as much as we can, but there is very little room to absorb any further increases.”

Mixed responses on current pay levels

Around 23% of charities said staff were already being paid at the new, higher rate prior to it coming into effect.

Several respondents said their pay levels are already higher than the minimum rate due to the nature of their roles.

“All our staff are paid more than the minimum wage because of the level of responsibility involved.”

“Our employees are paid slightly in excess of minimum wage, but we have to increase it to maintain the differential between roles.”

Knock-on effects across pay structures and costs

Several charities said the increase could also affect wider pay structures and overall running costs within their organisation.

Because pay levels often need to remain proportional across roles, increasing the lowest salaries can create pressure to raise pay for more senior staff as well.

One charity noted:

“Minimum wage increases are catching up with other salary levels, but funding has not increased. We cannot afford to raise all wages, but if we don’t, staff may leave.”

Others said that even where staff earn slightly above the minimum, increases can create pressure to review pay across the organisation.

“We need to review salary rates for all staff because the gap between roles is getting smaller, and we have no extra funding to support this.”

Some larger organisations also highlighted the scale of the challenge, particularly where staffing makes up the majority of costs:

“People are the backbone of our organisation, with 70–80% of our expenditure spent on staff. While increases to the National Minimum Wage are welcomed, the knock-on effect across the workforce creates significant financial pressure. This is partly because we rely on fixed grants and contracts that do not increase in line with inflation or wage costs. As a result, we are having to balance fair pay with financial sustainability, focusing on core services and the quality of delivery.”

Others said they expect increases in supplier costs, contractor fees and service charges as organisations across the sector adjust to higher wage bills.

Payroll costs expected to rise for most charities

Among organisations with paid staff, most expect between one and five employees to receive a pay rise when the new rates are introduced, although some larger charities reported more than ten employees affected.

For most respondents, the estimated increase in payroll is between £100 and £1,000 per month, but several expect increases of £1,000-£3,000, and a small number of larger charities anticipate rises of over £5,000 per month.

While 60% of charities said they will try to maintain current services, some indicated they may need to make changes, such as:

• reducing staff hours
• delaying recruitment
• redistributing workloads
• limiting new projects
• tightening overall spending

One charity commented: “We are having to reduce the number of staff we have, reduce what we deliver in the community and cut costs where we can. We are trying to fundraise and apply for grants, but this is getting harder, and there is a real risk the charity may not be sustainable long term.”

Increased reliance on grants and external funding

More than half of respondents said they expect to increase grant applications or seek additional financial support to manage the higher payroll costs. Some charities also said they may need to use reserves, while others warned that reserves are already limited.

Several comments reflected concern about long-term sustainability, including:

• risk of burnout due to reduced staffing
• difficulty competing for funding
• pressure to merge with other organisations
• concern that small charities may struggle to continue operating

One respondent said:

“We are trying to fundraise more and apply for grants, but competition for funding is getting tougher, and there is a real risk of burnout with fewer staff.”

Smaller charities likely to feel the greatest impact

Because most respondents were small charities, the results suggest the April 2026 wage increase may have the greatest impact on organisations with lower turnover and fewer funding streams.

Even where the direct payroll increase is relatively small, many said the change adds to existing pressures, including National Insurance increases, higher running costs and growing demand for services.

Several volunteer-run charities also noted that although they do not have paid staff, they still expect indirect effects through higher supplier costs and reduced donations as living costs rise.

Supporting charities through a changing cost landscape

The April 2026 minimum wage increase is an important step for employees, but the survey results show that many charities are facing difficult decisions as they try to balance fair pay with limited income.

WRS will continue to work closely with charities to provide support and insurance advice as the sector prepares for and adapts to an increasingly challenging financial environment.

About WRS

At WRS Insurance Brokers, we are specialists in Charity Insurance, and our team is passionate about the charitable sector. As a business with a strong social conscience, we’re committed to supporting the third-sector. 

WRS is proudly part of the Benefact Group, a charity-owned, international family of financial services companies that gives all available profits to charity and good causes.

*Survey conducted in March 2026 and based on 60 responses.