Age UK generated £9.6m less in its first year than Age Concern England and Help the Aged achieved together in their final year, according to the new charity’s first annual report.
The report reveals that total income for Age UK in 2009/10 was £160.7m. This compares with £170.3m generated by the two charities in 2008/09, before they merged.
But Age UK achieved a surplus of £1.3m for the year, compared with a combined deficit of £3.8m by Age Concern England and Help the Aged in 2008/09.
This was mainly achieved by cutting costs by £8.4m, including a reduction in the salary bill of £5.2m.
Staff numbers fell by 395 to 2,221 after the merger. This was achieved by compulsory and voluntary redundancies, not filling vacancies and freezing recruitment in some areas. One-off integration costs caused by the merger were £8.1m.
Voluntary income fell by £9.7m to £48.3m because of a decline in the value of donations and legacies by £6.8m and £2.6m respectively.
"The reduction in voluntary income was anticipated as there was a planned reduction in fundraising activity and the costs of generating funds were considerably lower as a result," the report says.
Trading income grew from £57.4m to £59.7m, and retail income declined from £45.4m to £44.3m.
Tom Wright, chief executive of Age UK, told Third Sector that the first year had been successful financially, particularly considering the scale of the integration, which involved 40 subsidiary companies as well as several charities under the old Age Concern and Help the Aged umbrellas.
"We’ve brought them all together under one roof, with one website, one database and a single name and brand," said Wright. "Sixty-seven per cent of people across the country are aware of Age UK. There aren’t many new organisations that would get that level of awareness quickly."
From the spring, all Age UK staff will be based in former Department for Work and Pensions premises in Tavistock Square, London. The charity has a 10-year lease on the building.