Income at Age UK fell by more than £13m last year as a result of changes to the charity’s trading arm, its latest accounts show.
The charity's accounts for the year to 31 March 2017 say that net income fell from £86.4m to £73.1m.
The accounts say this was due to changes that affected income from Age UK Trading CIC, which delivered £23.2m in income to the charity, compared with £31.1m in 2015/16.
The charity made a number of alterations to its governance and trading business in the wake of media claims in 2016 that Age UK was earning £6m a year from selling a two-year, fixed-rate promotional tariff with the energy firm E.ON that was £245 more expensive than the firm’s cheapest rate for 2015.
That led to the suspension of the energy tariff and the charity’s decision to leave the energy market, which the accounts say were a major reason for the fall in income from its trading arm.
The charity also sold its personal alarms service, Aid-Call, to AXA PPP healthcare in November 2016, which itself contributed to the fall in income, according to the accounts.
But the £13.8m the charity received in the Aid-Call deal will be reinvested in future income generation, including refurbishing the charity’s shops, the accounts say.
Expenditure fell from £80.8m to £73.2m, the accounts show, which the charity says was due to the conclusion of a number of UK-funded programmes and the closure of Age UK Training in 2015/16.
The accounts also set out the charity’s response to the Charity Commission’s case report on the E.ON arrangement, which Age UK says includes a new statement of trading principles, the appointment of new trustees and the creation of a new product review committee.
In her introduction to the annual report, Dianne Jeffrey, chair of Age UK, says: "There can be no ambiguity or suggestion that the trading company is subsidised by any kind of ‘charity pricing’.
"This has spurred us on to accelerate work that was already under way to rebrand our trading activity, and we will shortly introduce a new brand, name and design for our trading activity covering our financial services and independent living products.
"These changes are designed to make it easier for potential customers to understand the relationship between the trading company’s activities and those of the charity, and how their money supports our charitable work."
The accounts show that Age UK made a £9.7m actuarial loss on its defined-benefit pension scheme and redundancy costs at the charity fell from £3.5m in 2015/16 to £759,574 in 2016/17.