A joint statement issued by the two charities said Counsel and Care had faced financial difficulties because it had problems winning local authority contracts. Without the merger, said the statement, its services would be under threat.
Independent Age will initially take over as sole trustee of Counsel and Care. A full legal merger will take place as soon as possible, the statement said. The new charity will be called Independent Age, but the Counsel and Care brand will be retained for at least a year.
Janet Morrison, chief executive of Independent Age, will lead the merged organisation. Peter Watt, chief executive of Counsel and Care, will step down on 30 July.
Morrison said no immediate redundancies were likely because Counsel and Care had already reduced staffing levels. It cut its workforce from about 20 people to 10.6 full-time equivalent employees.
"In the long term, we will have to look at the future of individuals in the two organisations," said Morrison. "We’ll want to move everyone into the same office, but that won’t happen immediately, because Counsel and Care has two years left on its lease."
She said that she expected it to take six months for the two organisations to be fully integrated.
"This happened because of financial imperatives, but I actually think it’s a good move," she said. "Together we’ll be able to offer more comprehensive services for older people."
She said the move would mean only a modest increase in the size of Independent Age, which has about 260 employees and an annual turnover of £12.2m a year - 10 times the income of Counsel and Care.