Charities in 2026: Navigating Financial Pressure, Risk & Resilience

The UK charity sector performs vital work every day, supporting communities, delivering services and responding to social needs where others can’t. But in 2026, many organisations are operating in a difficult and increasingly complex environment. From rising costs and funding shortfalls, to technology risks and governance challenges, charities must now think strategically about risk, resilience and protection.

Financial Squeeze and Sustainability Challenges

Charities across the UK are facing intense financial pressure. Cost increases, especially higher employer National Insurance contributions, are pushing many organisations to the brink, with over half warning they may struggle to survive without action.

At the same time:

• Wage inflation and energy costs are squeezing overheads.

• Charities are drawing down reserves to balance books.

• Demand for charitable services continues to grow, stretching resources even further.

  
  

For many trustees, this means hard decisions about programming, staffing and long-term financial planning, and greater reliance on robust insurance to protect what resources they do have.

Rising Risk Complexity in a Digital Age

Charities are embracing digital tools to drive fundraising, support operations and extend their reach, which brings benefits, but also fresh vulnerabilities. Growing technology use exposes organisations to cyber threats such as data breaches, ransomware and online fraud, an issue highlighted in sector risk assessments and industry commentary.

With sensitive donor, volunteer and beneficiary data often stored online, a cyber attack can have both financial and reputational consequences, making cyber coverage and digital resilience planning critical components of any charity’s risk strategy.

Governance, Trustee Responsibility & Public Trust

Good governance is essential in a sector built on public confidence. The Charity Commission’s annual risk assessment highlights governance challenges including recruiting enough trustees, managing conflicts of interest and ensuring robust financial controls, all of which directly influence risk exposure and compliance.

Trustees face personal liability for decisions made under their governance remit, making trustee indemnity insurance a key risk mitigator. Specialist cover helps protect decision-makers from claims linked to alleged errors, omissions, or mismanagement, so leaders can focus on mission, not legal risk.

Volunteers, Public Liability & Operational Risk

Charities often rely on volunteers and run activities that involve public interaction, events, or facilities. This creates risk scenarios where public liability protection is vital, not just to cover compensation costs should someone be injured, but to safeguard organisational reputation and financial stability.

Whether running community events, charity shops or local support services, charities need insurance that reflects their unique operating environment, including employers’ liability for staff and volunteers, buildings and contents cover, and tailored indemnity protections.

Adapting to Change with Strategic Protection

In a sector defined by generosity and purpose, risk planning is often viewed as secondary to mission delivery, but that’s changing. Charities that embrace proactive insurance planning and risk mitigation are better equipped to sustain services, protect beneficiaries and withstand shocks.

Key takeaways for charity leaders in 2026:

• Review and update insurance regularly to keep up with financial, operational and digital risks.

• Strengthen governance frameworks to support trustees and protect public trust.

• Invest in cyber awareness and protection — not just technology, but training and incident response.

• Align insurance with organisational risk registers and strategic goals.

  
  

For charities, this is not just about compliance, it’s about resilience, continuity and safeguarding impact well into the future.