Children's Society records £13m loss after paying millions into its pension deficit

The Children’s Society recorded a £13m deficit last year after making a multimillion-pound payment into its pension scheme.

According to the charity’s latest accounts, total income was £37.4m in the year to the end of March 2020, down by almost £12m on the previous year.

The previous year’s income had been boosted by the £17m sale of the charity’s former London headquarters

The 2019/20 accounts show that spending increased to £52.6m from £37.7m in the previous year, as the charity made an £11m payment into its defined benefit payment scheme.

The charity said this was to de-risk its future liabilities in the scheme, which had a £15.3m deficit before the £11m payment was made. 

It made a net gain of about £2m on some investments, the accounts show. 

An additional £4m was invested in charitable activities and supporter engagement. 

Income from the Children Society’s 106 shops was the same year on year at £11.2m.

But the charity estimates the closure of its shops since March is costing it about £1m a month.

Total staff costs were £25.6m and employee numbers increased slightly to 783.

This included £123,000 in redundancy payments to 18 staff after frontline service contracts came to an end, said the charity. 

Mark Russell, chief executive of The Children’s Society, said: “We made sure we secured a good price for the building we sold and the investment in our pension scheme will mean more funds are free for our crucial frontline work with some of the country’s most vulnerable children and young people in the long run.”

Russell said Covid-19 had had a significant impact on the charity’s finances, but the effects were only just beginning to be felt at the end of the 2019/20 financial year.  

“We have worked tirelessly to protect, adapt and invest in our vital work and services which make such a positive difference to children’s lives, along with the jobs of the dedicated staff who deliver them. 

“However, this further lockdown inevitably means that we continue to face enormous financial challenges and continued uncertainty, and the generous support of the public, funders and the government will continue to be crucial.”

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