Age UK has put a £10m drop in its net trading income last year down to its decision to sell Aid-Call, its personal alarm service, and a general reduction in sales of independent living products.
The group’s net trading income fell to just over £13m in 2017/18 while sales of its mobility products, which include stairlifts, incontinence products, hearing aids and adjustable beds among other things, fell by £2.7m to £300,000.
The drop in independent living product sales was largely down to Age UK’s decision in 2016 to sell Aid-Call, its personal alarms service, to AXA PPP healthcare.
Issues with its hearing aid contract were also cited as a reason for reduced income. During 2017, Age UK Trading CIC worked with Claritas, a third-party provider of Age UK’s hearing aids to address “on-going contractual challenges”. But in June, Age UK terminated the contract.
A reduction in insurance income was also blamed for impacting on Age UK’s annual financial report. In 2018 Age UK’s trading arm, Age UK Enterprises, renegotiated its contract with Ageas “to ensure customers continue to receive a good price”.
The new contract, which came into effect in April, means a “significant and ongoing reduction” to the commission received by Age UK Enterprises and local trading partners – Trading Alliance Members (TAMs).
However, Age UK is confident the launch of its new trading brand, Age Co, will increase long-term opportunities for commercial trading.
Its report stated: “Age Co’s Trading Principles mean that Age UK’s trading subsidiaries are rightly focused on offering products that offer features that are good for older people, at prices which are fair and appropriate – this can mean that Age Co products are not the cheapest.
“Age UK Trading CIC and Age UK Enterprises are responding to these market challenges. Age Co, the brand for financial services and intendent living products, offers a significant platform for growth.”
A rebrand of Age UK’s trading arm has been planned for some time. The Age Co brand is designed to make it clearer to customers that when they buy one of its products it is a commercial transaction and the price of the product is not subsidised by the Age UK charity.
The Age Co brand officially launched in April but it will be rolled out across the entire range during 2019.