Edinburgh charities may be able to improve their financial resilience through smarter approaches to saving, despite ongoing pressure from rising costs and uncertain income streams, new research suggests.
A survey found that many charities hold substantial cash reserves, yet almost half lack confidence in their long-term financial stability. The findings point to a disconnect between balances held and the role those funds play in supporting sustainable operations.
While reserves remain a vital safety net, the research highlights an opportunity for charities to make their money work harder. By reviewing where cash is held and exploring more suitable savings options, charities could strengthen resilience without increasing risk or reducing accessibility.
The survey by Redwood Bank, MoneyComms’ Best Charity Savings Provider 2026, found that 69 per cent of UK charities hold over £50,000 in savings, with almost half (46 per cent) holding more than £100,000. When current accounts are included, 84 per cent hold more than £50,000 and 68.5 per cent hold over £100,000.
Despite these substantial balances, charities are under mounting pressure:
- 80 per cent reported rising day-to-day costs
- 73 per cent said they struggle to secure stable donations and funding
- 62 per cent have seen the value of donations decrease
- Almost half (49 per cent) lack confidence in their long-term financial stability
One charity said: “We face increases in demand for our services at the same time as our donations are falling. That combination is unsustainable.”
The research also shows that while 81 per cent of charities review their savings at least annually, many still do not seek alternatives that could improve returns. Fewer than half (44 per cent) do not hold a savings account with a second provider, choosing instead to keep their money in a current account, with over a third of these charities citing lack of awareness of the options available.
The survey highlighted what matters most when choosing a savings account. Alongside competitive interest rates (85 per cent), charities value accessibility and withdrawal terms (72 per cent), bank reputation (60 per cent), digital ease (56 per cent) and ethical or social values (51 per cent).
The findings have prompted the specialist Bank to draft its first Redwood Research Report, How smarter saving can strengthen the UK charity sector, which sets out practical steps to help organisations make their reserves work harder.
Jessica Darrah, Senior Savings Product Manager at Redwood, said: “Charities are working tirelessly to support communities but are often doing so under financial strain and with limited options.
“Our research shows that while many have substantial reserves, these funds are not always working as hard as they could or should be. When every pound matters, smarter saving strategies could make a real difference to financial resilience.
“As a specialist business bank, we can provide personal service with consistently competitive savings rates. The Bank has been recognised as the Best Business Variable Rate Deposit Account Provider at the Moneyfacts Awards for seven consecutive years, reflecting our commitment to delivering value and clarity for customers.
“Unlike traditional high street banks, we can focus on understanding the specific needs of charities and smaller organisations. Our dedicated savings products and knowledgeable team aim to make saving simpler, more transparent and better suited to the realities of the sector.”
The Redwood Research Report can be downloaded here:
