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2020-12-31-accounts

Annual report and accounts 2020

ssafa.org.uk

Regulars | Reserves | Veterans | Families

~~CONTENTS~~

~~A MESSAGE FROM OUR CHAIRMAN~~

Welcome to our 2020 Annual Report and Accounts

03 A message from our Chairman

04 SSAFA’s Governance Structure

05 SSAFA Committees

06 Trustees’ Report

18 Independent Auditor’s Report

22 Consolidated Statement of Financial Activities

23 Charity Statement of Financial Activities

24 Consolidated Group and Charity Balance Sheets

25 Consolidated Statement of Cash Flows

26 Principal Accounting Policies

32 Notes to the Financial Statements

Regulars | Reserves | Veterans | Families

The Soldiers’, Sailors’, Airmen’s and Families’ Association - Forces Help

Bankers

Queen Elizabeth House, 4 St Dunstan’s Hill London EC3R 8AD ssafa.org.uk

Coutts & Co

440 The Strand, London WC2R 0QS

Royal Bank of Scotland Plc

Registered Charity Numbers

West End Commercial Centre, 1st Floor, Argyll House, 246 Regent Street, London W1B 3PB

210760 (England and Wales) SC038056 (Scotland) 149 (Gibraltar) 20006082 (Republic of Ireland)

Investment Managers

BlackRock Investment Managers Ltd, 12 Throgmorton Avenue, London EC2N 2DL

Auditor

Moore Kingston Smith LLP, Statutory Auditor, Chartered Accountants, 60 Goswell Road, London EC1M 7AD

Solicitors

Withers LLP, 20 Old Bailey, London EC4M 7EG

SSAFA is deeply proud of all members of the Armed Forces community and is here for all those serving (regulars and reserves), veterans and their families - irrespective of service history, rank, regiment, gender, sexual orientation, ethnicity or religion. The support we offer is diverse, because our Forces family is diverse too.

Through our range of complementary services, and some new innovative programmes launched to directly tackle the unique impacts of Covid-19, we have supported 79,540 individuals in 2020. This is lower than last year as many traditional external referral routes contracted. Combined with the UK’s strong ‘Stay at home’ message, this resulted in a reduction in help seeking across society.

However, we saw a rise in urgent financial need; our Welfare Grants team distributed £231,669 to those most in need, with an additional £60,559 being distributed from our Crisis Fund. As the pandemic extended, SSAFA continued to respond and evolve new programmes and services to support our beneficiaries. Veterans Not Forgotten - our collaboration with AgeUKsought to help older veterans affected by the pandemic. Our SSAFA Together Project, funded by a National Lottery grant, supported local groups seeking to tackle loneliness and isolation in areas of significant veteran populations, including a meals-on-wheels service for the most vulnerable.

Forcesline saw a significant increase in the number of contacts, many related to loneliness and isolation. Operating throughout the lockdowns, our team of specially trained advisors dealt with 27,761 enquiries in 2020, without interruption, by moving our free, multichannel confidential helpline into their own homes.

We embraced new digital and virtual methods of service delivery, from online adoption assessments in the UK to midwife appointments in Cyprus. Our Learning & Development team ensured our volunteer and employee training continued throughout, with 1,646 volunteers and employees attending 112 virtual courses last year.

Anticipating falls in fundraising our teams sought additional income streams. We accessed exceptional Government-funded grants from the Department of Culture, Media and Sport and the Armed Forces Covenant Trust Fund, with a combined total of £750,000. In April 2020 we also launched our

Emergency Response Fund Appeal which raised over £250,000 to provide essential crisis grants to those most in need.

We launched our SSAFA@140 programme in 2019, with the objective to focus on optimising our network to ensure sustainability and being able to provide a timely and quality assured service for the next decade and beyond. Implementation will start in 2021 and we have resolved to reduce our regional structure but with increased paid support.

We also commissioned an external review of the Charity’s governance by our internal auditors Mazars. Whilst finding no major failings, the report provided a 20-item action plan to optimise our governance of the Charity, which included adjustment to some procedures, recruitment of additional, more diverse talent and decide how to make better use of our committees and Vice Presidents.

2020 was not just the year of the Pandemic, it also marked monumental moments in history: 20th anniversary of the military ban lifted for people expressing same sex attraction from serving, 75th anniversary of VE Day and VJ Day, 30 years since the Royal Navy first women to sea, and SSAFA’s 135th anniversary. Our plans to mark VE Day and VJ Day 75th anniversary and commemorate the wartime generation, all had to be cancelled. We were able to participate in the national virtual moments, sharing stories of SSAFA beneficiaries from the wartime generation. 100 million people saw our SSAFA brand over the VE Day weekend and our fundraising was bolstered.

As the impact of Covid-19 was felt by all, the wartime spirit was often evoked. Our 4,751 volunteers UK-wide and around the world, supporters, beneficiaries and employees all exhibited this zeal. We responded, adapted and rose to the challenges of the pandemic. I am humbled by all their efforts and support, ensuring SSAFA continues to be there for the Armed Forces community, for as long as they need us.

Lieutenant General Sir Gary Coward KBE CB National Chairman

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~~SSAFA’S GOVERNANCE STRUCTURE~~

~~SSAFA COMMITTEES~~

This page provides an overview of SSAFA’s governance structure.

SSAFA is governed by a Trustee body, referred to as SSAFA Council, with our National Chairman the Chairman of Council.

Officers of the Association (Chairman, Vice Chairman and Treasurer) and Members of the Council are all Trustees. They are incorporated as a body operating under the Association’s Royal Charter. One third of our Trustees are required to retire each year but are eligible for re-election by the Association.

Trustees are ultimately responsible for all matters concerning governance, strategic direction, legal operation and financial probity. They exercise authority only when making a majority decision at a duly constituted meeting of Council, comprising between seven and 17 members.

Our Chief Executive, known as the Controller, is responsible to the charity’s Trustees for the management of SSAFA’s global activities. The Controller chairs the Management Board, which oversees SSAFA’s wide range of activities in support of the Armed Forces community.

PATRON

HONORARY TREASURER

Her Majesty The Queen

Mr David Rowe

COUNCIL MEMBERS

PRESIDENT

HRH Prince Michael of Kent

Mr James Carleton Warrant Officer Class 1 Glenn Haughton (retired May 2021) Commodore Peter Cowling (retired March 2020)

VICE PRESIDENTS

Lady Carleton-Smith Lady Carter The Lady Dannatt The Baroness Fookes

Mr David McCorkell

Lieutenant Colonel (retd) Graham Meacher Mr Robert Murphy Air Vice-Marshal Charles Ness Colonel Stephen Oxlade

Lady Hillier (retired December 2020) Lieutenant Colonel Colin Hogg The Lady Houghton Surgeon Captain Alan McEwan The Lady Walker The Rt Hon Lord Westbury Lady Peach (retired July 2020)

Mr David Singletary (retired December 2020) Mrs Evelyn Strouts

Dr Diana Wood

CONTROLLER Lieutenant General Sir Andrew Gregory

CHAIRMAN

SECRETARY AND FINANCE DIRECTOR

Lieutenant General Sir Gary Coward

Mr Simon Blum

SSAFA has a number of committees overseeing different work streams. Each is chaired by a Trustee with the intention of providing advice and support for our Council in governance in order to achieve the objectives of the charity.

The following committees meet on a quarterly basis:

Under the authority of Council, SSAFA operates three subsidiary companies, one Limited Liability Partnership and one incorporated charity:

For further information and governance details, please refer to pages 15-16.

VICE CHAIRMAN

Wing Commander Kirsty Bushell

SSAFA’s Council meets on a quarterly basis and ensures the charity is carrying out its purposes for the benefit of our beneficiaries, is accountable, and complies with our governing documents and the law, as well as ensuring our resources are managed responsibly.

There are also several standing Council agenda items which include;

Safeguarding, Fundraising Strategy & Policy, Equality Diversity & Inclusion, as well as Data Protection and Information Management - which is managed by an independent Data Protection Officer.

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~~TRUSTEES’ REPORT~~

We, the Trustees, are pleased to present the annual Trustees’ Report and the consolidated financial statements of the Charity. These financial statements comply with SSAFA’s governing document, the Charities Act 2011, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Act (Gibraltar) 1962-12, the Charities Act 2009 (Republic of Ireland) and the Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019).

OUR CHARITABLE OBJECT AND ACTIVITIES FOR THE PUBLIC BENEFIT

SSAFA is a public benefit entity. The Trustees have given due consideration to the Charity Commission published guidance on the operation of the Public Benefit requirement, and confirm that the objects of SSAFA, as established and incorporated, are to relieve the need, suffering and distress of all those who are serving or have served in the Armed Forces of the Crown, and their families and dependants. There are only two criteria for assistance: eligibility and need.

Crucial to the successful delivery of all our charitable activities is a network of more than 4,750 volunteers across the globe. It is impossible to quantify the value of their contribution in monetary terms, and therefore no amounts are recorded in the financial statements.

DURING 2020, SSAFA’S SERVICES FOCUSED ON:

Welfare advice and support — our network of

branches in local communities and service committees on military bases offer practical, financial and emotional support. We help serving personnel, both regulars and reservists, veterans and their families with everything from financial hardship to family breakdown.

Tailored support services — we mentor service leavers and their families as they transition from the military to civilian life, support veterans and their families in the criminal justice system, provide a support service to the UK Gurkha veteran community and, with Glasgow City Council, provide welfare and wellbeing support to members of the Armed Forces family in Glasgow. We also help older veterans struggling with disability, sourcing practical items such as mobility aids or replacing household goods. Our free confidential helpline, Forcesline, provides a wide range of financial,

practical, and emotional support to the Armed Forces community. We offer long-term accommodation for older and disabled veterans and we have short-term housing available for families of injured service personnel as well as for women and children affected by domestic violence from families serving in the Armed Forces. We run a series of support groups; ranging from families affected by injury or bereavement to those affected by the suicide of a loved one as well as a support forum (FANDF) for those in the military who have a family member with an additional need or disability. We also provide short break holidays for those Forces families with additional needs and disabilities. In addition, we operate the UK’s only adoption agency specifically designed for Armed Forces serving personnel, which is Ofsted-rated as ‘Outstanding’. This tailor-made service for military families, provides support throughout the adoption process, including family finding, link-making and post-adoption support.

Health and social care services — we provide primary

and community health care in nine countries and overseas territories around the world - Cyprus, Brunei, Gibraltar, Canada, Germany (centred on Sennelager), Belgium, the Netherlands, Italy and Kenya. Depending on the requirements, these services range from Ministry of Defence [MOD] Contracted Community Healthcare in Cyprus to Grant-in-aid Health Visiting in Kenya and Speech and Language therapy in Brunei. Up until June 2020 we were providing personal social work services (PSWS) in Cyprus. We are currently providing PSWS to the Royal Air Force (RAF) in the UK under contract to the MOD.

DELIVERING AGAINST OUR 2020 AIMS

AND OBJECTIVES

We are focused on continuing to ensure that the needs of the Armed Forces, veterans and their families are met in an appropriate and timely way. We exist to relieve need, suffering and distress amongst the Armed Forces, veterans and their families - to support their independence and dignity. Our five strategic aims deliver this through:

1. Understanding need: We will ensure that we understand and adapt to the needs of those we support.

2. Effective support: We will alleviate suffering and

3. Awareness and understanding: We will strive to be recognised, known and understood.

4. Sustainable resource: We will ensure we have people with the right skills and sufficient time to deliver our services, underpinned by a sustainable income.

5. Collaborative working: We will work collaboratively within the organisation and with external partners.

We will continue to drive progress against these strategic objectives and meet client need against a dynamic backdrop of change. Our core services, which will always focus on the needs of our beneficiaries, are met either through our volunteer casework, meeting serving communities’ needs, or through mentoring and working with individuals at all stages of the criminal justice system.

During the last 12 months, we have seen a fall in income from contracted services. Despite the Covid-19 pandemic and subsequent lockdowns, however, 2020 proved to be more financially resilient than we had originally forecast when the first lockdown was enforced in March 2020.

In line with our strategic aim of achieving sustainability and in response to an uncertain financial impact during the Covid-19 pandemic, a proportion of our employees were included in the Government furlough scheme in 2020. In addition, around a third of remaining staff members had a 20 per cent reduction in hours and pay imposed from May 2020. This was then subsequently reduced to 10 per cent in July, with hours and pay reverting to 100 per cent in October 2020. Frontline service staff and those employed on MOD contracts or Grant-in-Aid were exempt from these cuts, ensuring our most vital services continued to operate throughout the crisis. Further cost savings came from the switch to remote training and working, reducing travel and accommodation expenses. These measures had a combined saving of approximately £900,000.

We also worked collaboratively to seek out new funding streams during 2020. Charitable donations from public collections and branch activities were significantly reduced due to the pandemic, along with the majority of our fundraising events which had to be cancelled. In 2020 we secured substantial Government-funded major donations and grants to support our work. SSAFA was awarded in total £750,000 from funds drawn from separate applications to the Department for Digital, Culture, Media and Sport [DCMS] and the Armed

Forces Covenant Trust Fund [AFCTF].

A significant element of the Charity’s activities is the granting of funds to eligible individuals. SSAFA volunteers sourced over £10 million during the year to assist our clients.

OUR ACHIEVEMENTS AND PERFORMANCE IN 2020

6 ANNUAL REPORT AND ACCOUNTS 2020

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• Our central Welfare Grants team received 1,241 requests for support last year. 628 people were supported with funds totalling £231,669.

A further 387 requests for financial aid totalling £60,599 were met by our Welfare Grants team through the Boeing Crisis Fund. This fund was set up in 2020, in direct response to the Covid-19 pandemic and funded by a generous donation from the world’s largest aerospace company Boeing. The Boeing Crisis Fund ensured that veterans and their families experiencing urgent need and hardship received swift assistance. This was a lifeline as it was at a time when caseworkers were isolating, branch operations were restricted and almonisation processes across the sector were experiencing delays.

• We supported 747 people through our mentoring programmes, 94% more than in 2019. The age range of those accessing the service is 17-50 years old, and 2020 saw a 37% increase in the number of women across the Armed Forces accessing SSAFA Mentoring. As demands for this service increase, we are actively recruiting new volunteer mentors. Despite the lockdown restrictions, we were able to train a further 79 mentors and SSAFA remains the only military charity to be accredited for mentoring by the National Council for Voluntary Organisations.

• We helped 1,326 prisoners or family members of prisoners through our Veterans in the Criminal Justice System [VCJS] Support Service. Due to the Covid-19 pandemic, our SSAFA volunteer caseworkers have not been permitted to visit prisons, which has resulted in a fall in the number of people accessing this service in 2020. Our volunteers have however worked tirelessly to find new ways to support prisoners remotely using email, and have also focused their support on those families needing assistance outside.

• 2,353 people were helped this year by our Gurkha services. The project offers a wide range of services across the UK, including Nepali speaking caseworkers, translation services, English lessons and a comprehensive programme of raising awareness amongst healthcare service providers, the local community and Government. Traditionally, our Gurkha support has been face-to-face due to language barriers, however the pandemic significantly impacted on this. The majority of those we support are elderly with over 60% being in the 70–79-year-old age range.

As they are particularly vulnerable to Covid-19 this meant that our regular contact and our outreach activities were significantly restricted.

• Glasgow’s Helping Heroes, our partnership with Glasgow City Council, supported 235 people in the city. 2020 was the 10th anniversary of this service. Our beneficiaries needed more ‘life essential’ support than in previous years. With a marked increase in food poverty being seen, our Glasgow’s Helping Heroes service provided food in the form of foodbank vouchers, supermarket vouchers, or hampers throughout the year with 56 different clients receiving 156 emergency food supplies. In comparison to 2019, this support was only needed by 26 clients and only 48 times, clearly illustrating that food poverty in the local veteran community has more than doubled in the last 12 months and the frequency of support required has more than tripled.

• We placed nine children with adoptive military families. All these children were considered harder to place due to their age, being in a sibling group or having additional needs. We approved nine new households to adopt, half of which were same sex couples, far higher than the national average for adoption. In total, 409 households were supported by our Adoption services in 2020, with 268 of these being new households enquiring about adoption through SSAFA. Throughout, our Adoption service has remained operational, with adoption preparation group events held virtually, as well as the adoption panel approvals process being conducted online. Our adoption social workers remained in constant touch with the families they were supporting, becoming a lifeline at a time of global uncertainty.

• We ran 11 Support Group events for those facing bereavement, military families affected by suicide and families of wounded, injured, and sick personnel. 74 beneficiaries attended the events through 2020, with all but one of these events having to take place online due to the Covid-19 restrictions. Themed sessions with topics such as Wellbeing, Creativity and a Q&A on coping with bereavement proved popular and we will be offering more of these virtual events.

• 17,274 people have accessed our UK National Support Fund from across Germany, France and Cyprus. Launched in February 2020 the project is aimed at supporting veterans in Europe following Britain’s departure from the EU. Working in partnership with the Foreign Commonwealth & Development Office, local SSAFA trained caseworkers are assisting UK national veterans living overseas, with their residency applications. In Cyprus, 76 veterans supported by SSAFA have now secured residency. Other applications in all three countries of operation are pending.

- 38 residents in our bungalows across the country.

Like all our operations and services, our housing provisions were also negatively impacted by the Covid-19 pandemic. With both operations and rehabilitation activity restricted at the Defence Medical Rehabilitation Centre [DMRC], there were fewer patients and visitors requiring accommodation at Norton House. At Fisher House, with many appointments and consultations at Queen Elizabeth Hospital Birmingham carried out virtually and a reduction in training incidents within the Armed Forces, there were fewer patients and their families needing our assistance. However, our teams were not idle during the pandemic, Fisher House answered the call from the MOD and NHS to provide additional accommodation to nursing staff during lockdown to minimise travel and the Norton House team made good use of the quieter periods to install a new playground and air conditioning in the house.

For our Stepping Stone Home, the impact of Covid-19 was also felt, with a 104% increase in the number of women and children accessing the service from the local community. Gildea House provides a secure, female-only place of safety for women and children of the Armed Forces community. One of the well documented impacts of the Covid-19 pandemic nationally was a significant rise in the incidents of domestic abuse and coercive control. Enquiries to Stepping Stone have doubled in 2020 compared to 2019 in line with national trends.

Our streamlining of our housing services over the past two years, which includes the sale of St Vincents Residential Home in 2019 and bungalows on the Isle of Wight in early 2020, has resulted in an overall reduction in the number of people housed directly by SSAFA.

SOCIAL CARE OPERATIONS

2020 marked the 30th anniversary of our RAF Personal Support and Social Work Service. This MOD contracted welfare service is run by a team of 60, providing support to the RAF community on base. In 2020, 4,675 service users were supported, with 3,205 consultations, 984 referrals, 337 Long Term Sick [LST] referrals and 149 welfare supervisions.

We saw a significantly higher need for support in the first quarter of 2020 than in 2019. The majority of support required was for personal support, mental health and relationships - a similar picture to 2019. However, there was a notable increase in support

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required around housing, accounting for 10.54% compared to 7.03% in 2019. Once again, our RAF Personal Support and Social Work Service was highly rated by service users, with 99% rating the service as ‘Very Good’ in 2020.

COMMUNITY HEALTHCARE OPERATIONS

We provided primary and community healthcare to thousands of Armed Forces and entitled personnel and their families in nine countries around the world.

• In 2020 our teams provided in excess of 3,000 consultations across the services to serving personnel and their families in Cyprus, with 404 new referrals made to the Community Healthcare service. Our midwives and health visitors supported the mothers of 120 babies born on the island in 2020, while health visitors supported children 0-5 years delivering the Healthy Child and UK Immunisation Programme. Nearly 300 school age children participated in the National Child Measurement Programme (NCMP).

As well as providing essential and highly valued support to the Armed Forces around the world, these commercial contracts are an important source of income for the Charity and the surplus revenue generated makes an important contribution to SSAFA’s annual financial performance.

LEARNING AND DEVELOPMENT

All our volunteers and employees are provided with learning and development relevant to their roles within the organisation, to assist them in delivering the best support and service to our beneficiaries. Traditionally this training has been delivered face-to-face. The Covid-19 restrictions in place for the majority of 2020 meant we had to establish new forms of training delivery.

The introduction of our online training and modular approach to volunteer induction courses has given us more flexibility and more cost-effective training options. The virtual training delivery is also more accessible for our volunteers; reducing the amount of time and travel required, as well as being more flexible so that they can be trained in the comfort of their own home and work around any other caring responsibilities they may have.

As a result we have been able to continue to recruit and train new volunteers and new employees, ensuring that they receive the highest quality training so we can continue to provide effective, timely support to those who need it most. In 2020 1,646 volunteers attended different webinars, with 112 courses run last year including Mentoring, Remote Caseworker course, Mental Health First Aid, as well as investing in Equality and Diversity training.

MEASURING AND EVALUATING THE IMPACT OF

OUR WORK

In line with the Charity’s strategic plan demonstrating the impact of SSAFA’s services provided to our beneficiaries is key in allowing us to better understand the needs of the Armed Forces community and their families.

SSAFA’s approach to measurement of these outcomes begins with developing a theory of change for each support service, which allows us to identify those outcomes we wish to explore. This forms the basis for an evaluation plan where we develop or use existing validated tools to demonstrate how we have helped our beneficiaries. We do this using a range of methods including outcome measures, feedback surveys, qualitative and economic studies, as our approach depends on the individual service’s need. SSAFA employs a continuous improvement approach when measuring impact. This allows us to not only measure success, but also learn how we can improve so that we continually develop our services to meet our beneficiaries’ needs.

Where appropriate, SSAFA appoints external evaluators to measure the outcomes and impact of our services,

with methods including surveys, interviews and focus groups. For example, researchers from the University of Stirling and Glasgow Caledonian University are currently conducting an evaluation of our Glasgow’s Helping Heroes, funded by Forces in Mind Trust (FiMT).

Exploring the impact of our services is of high priority to SSAFA. Therefore, we are undertaking a pilot using the Outcomes Star to measure the impact of our interventions at Glasgow’s Helping Heroes.

OUR FOCUS ON COLLABORATIVE WORKING

At the heart of SSAFA are our beneficiaries – those that need our support. It is vital that we continue to develop our services to meet the current and future needs of the Armed Forces community. We need to adapt and evolve what we offer, as their needs change. We will continue to monitor and analyse these changing needs in the Forces family, refining what we deliver, so that it continues to service these unmet needs.

To ensure this is done in the right way, at the right time, we have launched our SSAFA@140 programme, which focuses on our internal organisational development and developing a sustainable future for our organisation. We want to create a consistent volunteer support network for SSAFA by successfully recruiting and training volunteers and employees, whilst ensuring the delivery of timely quality-assured support to our beneficiaries - wherever they are.

At the same time, we are working with and supporting the Confederation of Service Charities (Cobseo) to develop greater coherence and co-ordination of support with other military charities. We want to make certain that all beneficiaries get the best possible help in a timely, consistent manner so that our support services complement each other, rather than duplicate, those offered by other organisations.

MILITARY WIVES CHOIRS

The Military Wives Choirs Foundation (MWCF) is a registered subsidiary charity of SSAFA. There are nearly 2,000 women with a military connection in our 72 choirs in the UK and on British military bases abroad, including Cyprus, the Falkland Islands, Brunei and Riyadh. Our choirs are open to women from across the military community from 18 upwards, including wives, partners, serving personnel, veterans and mothers.

In early 2020, the MWCF was delighted to be part of the major motion picture Military Wives. Our network of 72

choirs feature in the final scene, and on the accompanying film soundtrack.

The Covid-19 pandemic has meant that all traditional musical activity for the choirs was cancelled from March 2020. However, the choirs demonstrated their versatility by embracing virtual music-making. Choirs came together via Zoom weekly, and for projects, including a network-wide, digital Christmas performance and a virtual Act of Remembrance.

In November 2020, the Military Wives Choirs released their single ‘Abide with Me’, in partnership with Westminster City Council, to mark the centenary of the Journey of the Unknown Warrior.

Throughout 2020, the Military Wives Choirs staff team of four have continued to support the choirs, provide guidance on rehearsing safely and providing training opportunities. The choirs’ 72 volunteer committees, made up of choir members, have also continued to ensure that members can access the wellbeing, mental health and welfare benefits Military Wives Choirs membership brought during this difficult year.

RAISING OUR PROFILE

SSAFA wants to be the ‘expert’ voice for the issues faced by the military community and seen as a trusted, passionate, professional support network and service provider. We will aim to grow and improve our brand presence to assist beneficiaries seeking help, target volunteers and employees who want to work for the Charity and grow one-off donors into life-long supporters of SSAFA.

We need our multiple audiences and stakeholders to know who we are, what we do and how we can help. In 2020, in total we reached more than 688 million people across a variety of media communications platforms, both on and off-line. This included more than 2,950 pieces of coverage across the national and regional newspapers, broadcast outlets, as well as in consumer and military press.

SSAFA benefitted substantially from the national coverage of the 75th anniversary of VE Day on 8 May 2020 bank holiday weekend. Despite the lockdown, SSAFA’s media activity for VE Day 75 was extensive and, as a result, the SSAFA brand was seen by over 100 million people over the course of the weekend.

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FUNDRAISING FOR OUR WORK

In 2020, we raised £11.3 million from donations, grants, legacies, events and trading activities, of which £1.4 million was raised by volunteers in their local communities. The areas of fundraising most impacted by Covid-19 were our Challenge and Special Events. Three significant fundraising events – the VE Day 75 Concert at the Royal Albert Hall, RHS Chelsea Flower Show and the annual Defence Industry Charity Dinner were all cancelledor postponed, as were our summer events including Battle Proms and National Armed Forces Day in Scarborough.

However, in line with our strategic aims of long-term sustainability and collaborative working, SSAFA has found other sources of income to mitigate the losses brought by the pandemic and lockdown. Our Emergency Response Fund Appeal launched in April 2020 raised over £250,000 during the year, enabling us to provide crisis grants to those in urgent need of assistance and ensure our front-line services remained open. In addition, we secured significant Government funded Covid-related grants from the Department for Digital, Culture, Media and Sport and the Armed Forces Covenant Fund Trust totalling £750,000.

We have been humbled by the extraordinary generosity of our supporters throughout this challenging year. We extend a sincere thank you to all our donors: individual, corporate, grant-givers and commercial partners, as well as other collaborating organisations, for their support during 2020.

PARTICULAR THANKS GO TO:

LOOKING TO THE FUTURE

The many impacts of Covid-19 will be with us for a long time, so close attention to ensuring financial sustainability is a priority for the Trustees and senior management team who will continue to closely monitor the impact of the crisis on our income, expenditure, fundraising and communications.

• We need to ensure that we continue to support our volunteers and employees, deliver outstanding services - both face-to-face and virtually - and strengthen our cross-sector collaboration. In 2021, we will be enhancing our support through the SSAFA@140 programme, which aims to future proof our vital work as we approach our 140th year of operation in 2025. The changes brought in under the SSAFA@140 programme include establishing regional hubs which will support our volunteer network and ease their administrative burden. It will ensure consistent, timely, quality assured service to all our beneficiaries wherever they are, whenever they need it, across our UK footprint and in locations worldwide.

• We will continue to meet our contractual obligations to provide high-quality health and social care to the Armed Forces in the UK and overseas. We will respond to the reduction in contracted services income whilst maintaining our existing excellent standards of service, be creative in searching for solutions to fundraising activity in the Covid-19 reality and continue to be cost conscious.

• Investment in fundraising and supporter engagement is vital to SSAFA’s future. We want to ensure we continue to raise awareness of our charity and our profile to drive external communications and generate the income needed in very challenging circumstances. We will still focus on our three communications objectives; raising awareness of the SSAFA brand and the different types of support we offer across the whole of the Armed Forces family, driving our fundraising and building our volunteer network through active recruitment.

FINANCIAL REVIEW

As required, the accounts have been prepared under Charity SORP (FRS 102). To meet the requirements of the Office of the Scottish Charity Regulator, a Statement of Activities (with supporting notes) has also been prepared for the Charity (as shown on page 23).

FINANCIAL OUTCOME

The Consolidated Statement of Financial Activities for the year show that there was an overall surplus in the year before actuarial gains of £2.8 million (2019: £3.1 million). This comprises a surplus on unrestricted funds of £2.2 million for the year (2019: £2.8 million) and a restricted fund surplus of £0.6 million (2019: £0.3 million).

Donations and legacies received in the year were £6.7 million (2019: £6.3 million) and £3.2 million (2019: £2.4 million) respectively. The costs of raising voluntary income were £756 thousand (2019: £757 thousand).

The branches continue, through their volunteer network, to raise significant funds of £10.4 million (2019: £13.2 million) from service and other charities to assist a wide variety of Forces-related individuals in need. At 31 December 2020, £1.6 million (2019: £1.9 million) was being held for unalmonised grants for imminent distribution to the individuals for whom the funds were raised.

Health and welfare activities contributed £1.7 million (2019: £2.1 million) to the Group. This includes the activities of SSAFA Family Health Services, which is responsible under contract to the MOD for the delivery of health services, and until June 2020 for personal support and social care services in Cyprus. The group continues to provide the RAF Personal Support and Social Work Services in the UK. The principal Germany contract was provided under sub-contract to the Group’s joint venture, SSAFA GSTT Care LLP and the contract expired in September 2020. Whilst income and

expenditure decreased significantly, the margin reflects improved cost-management initiatives.

The pension fund deficit has increased by £15.4 million to £17.1 million at the balance sheet date. Changes in the valuation reflect a decrease in discount rate used to calculate the present value of fund liabilities to 1.3% (2019: 2.1%) offset against the lower return on investments experienced particularly around year end due to the economic climate and does not involve an outflow of cash.

SIGNIFICANT EVENTS

Covid-19 has resulted in a significant fall in some sources of income, notably fundraising events which have had to be cancelled. The Charity has however secured funding from government grants to assist our clients (see p7).

The expiry in September 2020 of our commercial contract to supply healthcare services to serving personnel and their families in Germany has brought to an end a long-term source of funds to support our clients. This change is one of the significant factors driving the Charity’s strategic aims set out above and the reserves policy below.

INVESTMENT POLICY

SSAFA’s investment policy is to produce the best financial return within an acceptable level of risk. The investment objective is to generate a return in excess of inflation over the long term whilst generating an income to support the ongoing activities of SSAFA branches. SSAFA has a broad range of income sources that would allow it to continue with its activities were markets to fall. The key long-term risk is inflation, and the investment assets are invested to mitigate this risk. The Trustees understand that this is likely to mean that investment will be concentrated in real assets (equities and property) and that therefore the capital value will fluctuate. As a result they are prepared to take more than a moderate amount of risk. SSAFA’s investment assets can be invested widely and be diversified by asset class and by security. Asset classes can include cash, bonds, equities, property, hedge funds, structured products, private equity, commodities and any other asset that is deemed suitable as defined by the Charity Commission in CC 14. The Investment Policy has no ethical restrictions.

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The majority of SSAFA’s funds are invested in the Armed Forces Charity Authorised Investment Fund, a fund specifically designed for service and ex-service charities. The objective of the fund is to achieve longterm growth of both capital and income.

Performance of the fund is measured against a benchmark constructed to represent a balanced portfolio of investments comprising UK and global equities, property and UK and overseas bonds. In 2020, the fund recorded a total return of 9%, which was above the benchmark. Dividends for the year were maintained at 7.9p per unit.

RESERVES POLICY

Taking into account the long-term strategic plan that the Trustees agreed in 2018 and the analysis carried out since on the financial demands of providing a modern service that meets the needs of all stakeholders, the Trustees have agreed that the Charity needs to sustain its current level of reserves in real terms. This is made all the more necessary given the current crisis and pressures on income from the unavoidable decline in health and social care contracts. The Charity’s reserves underwrite the day-to-day operation of the branch network as well as the many other capabilities SSAFA provides to its beneficiaries. The reserves are held in a combination of investment properties, listed investments and cash. The Trustees currently forecast that reserves will be used to cover annual deficits for the next five years if other sources of income do not increase to meet the rising costs of serving our beneficiaries’ needs. The Reserves Policy of sustaining current levels in real terms means, after completing the new strategy, that the Charity’s reserves should be able to fund annual core running costs in a crisis, as they will do in 2021. To do otherwise would put at risk the existence of the Charity. The Trustees have learnt from other charities that have not had a sustainable business model and not had sufficient reserves to maintain, over the long term, the vital service they deliver to their clients, many of whom have long-term needs, when income falls.

• At 31 December 2020, the unrestricted general reserves (which include designated funds) that were not represented by fixed assets amounted to £25.1 million (2019: £35.8 million) including the pension deficit of £17.1 million (2019 - £1.7 million).

GRANT MAKING

Assistance from the unrestricted funds may be used only to relieve the need, suffering and distress of those eligible for our help, as described in the Objects of SSAFA. The Regulations of SSAFA do not permit our funds to be used for gifts, grants or subscriptions to charities, hospitals, schools or other funds, societies or institutions.

FUNDRAISING POLICIES

SSAFA carries out its core fundraising activities through a dedicated team of paid professional fundraisers managed from its London office, and through registered volunteers who engage in small-scale fundraising activities to help support branch-level activities.

SSAFA’s central fundraising team generates income through a mix of grant, donation, contract, sponsorship and commercial activities. It also oversees branch-level fundraising activities and provides support, training and guidance to its volunteer fundraisers to ensure that the Fundraising Code is followed and that best practice and legal fundraising standards are applied consistently across the organisation.

As part of its activities to recruit individual supporters through payroll giving schemes, SSAFA engages three specialist Professional Fundraising Organisations (PFOs) to represent the charity. All such agreements are subject to legal contract, including how data is collected, stored, processed and shared.

SSAFA’s merchandise and trading activities are managed through SSAFA Forces Help Enterprises Limited. Sponsorship and/or cause-affiliated marketing partnerships are managed through commercial participation agreements.

DATA PROCESSING POLICY

Since implementation of General Data Protection Regulations in May 2018, SSAFA has updated its data processing policies to ensure that it is fully compliant in the processing and sharing of personal data. Data sharing agreements are now in place with third-party partner organisations who support SSAFA’s fundraising activities. SSAFA’s policies relating to GDPR are reflected in the Data Privacy Notice that is included in all direct communications with supporters and beneficiaries, as well as the Privacy Policy which is displayed on SSAFA’s website (www.ssafa.org.uk/ privacy). In addition to having signed up for the Fundraising Preference Service, SSAFA also maintains its own suppression list. All volunteers and employees are mandated to complete training on GDPR. SSAFA (The Soldiers’, Sailors’, Airmen’s and Families’ Association - Forces Help) is fully registered with the Fundraising regulator, and no complaints were made during the year

STRUCTURE, GOVERNANCE AND MANAGEMENT GOVERNING DOCUMENT

SSAFA The Soldiers’, Sailors’, Airmen’s and Families’ Association - Forces Help was established in 1885 under Royal Charter. SSAFA’s Charter and Rules and Regulations were extensively revised in 2013 and approved by Council in January 2014. The Charter allows the Trustees to establish Regulations for the day-to-day management of the Charity. SSAFA is registered as a charity in England and Wales (Number 210760) in Scotland (Number SCO38056), in the Republic of Ireland (Number 20002021) and in Gibraltar (Number 149).

TRUSTEE INDUCTION AND TRAINING

Regulations require that each Trustee attends an introductory briefing. Each Trustee must attend formal annual training including GDPR, Safeguarding and Diversity & Inclusion.

MANAGEMENT PAY

The Vice Chairman’s Committee is responsible for reviewing and deciding any salary increases applicable to all employees including all levels of management. The Charity does not operate a performance related salary or bonus scheme. Any proposed changes to management pay will consider the remuneration of comparable internal roles and external roles in similarly sized charities.

In 2020 SSAFA’s annual gender pay gap report revealed that the median gender pay gap is just 1.73%, the national average is 15.5.% (2020 ONA ASHE). In April 2017 SSAFA’s median gender pay gap was at 13.6%. Interventions over the past four years have reduced the difference in pay between male and female staff at the Charity to achieve the considerably lower 1.73% figure for 2020.

SUBSIDIARY CHARITIES

The Charity has three subsidiary Charities: The Royal Homes, regulated under a Charity Commission Scheme in 1998; the Aircrew Association Charitable Fund, regulated under a Charity Commission Scheme in 2012 and The Military Wives Choirs Foundation, which was established on 30 May 2012 as a private charitable company limited by guarantee, Company Number 08089745, Registered Charity Number 1148302 and in Scotland, Charity Number SC045217. The Royal Homes and the Aircrew Association Charitable Fund are administered as part of SSAFA as a result of these schemes, and their results are included within the results of the Charity. The Military Wives Choirs Foundation is a subsidiary of SSAFA and prepares its own annual financial statements which are not included in SSAFA’s charity accounts but are consolidated within the Group financial statements together with the results of the Charity’s three commercial subsidiaries.

SSAFA OPERATIONAL ENTITIES

Under the authority of Council, SSAFA operates three subsidiary companies and one Limited Liability Partnership. Each company is run for the benefit of the Charity by paid employees who fill the key posts of Managing Director, Finance Director and Company Secretary, and includes Trustees as additional external members of the Board. Each Company and the Limited Liability Partnership report as required to Companies House.

Details of the Companies and the Limited Liability Partnership are given below:

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cards and other merchandise, and enter into other noncharitable commercial arrangements.

OTHER CHARITABLE JURISDICTIONS

In order to operate in Scotland, SSAFA has been registered with the Office of the Scottish Charity Regulator Register of Charities under number SC038056. In order to operate in Gibraltar, SSAFA has been registered with the Charity Commissioners for Gibraltar Register of Charities under number 149. In order to operate in the Republic of Ireland, SSAFA has been registered with the Charities Regulator under number 20002021.

RISK MANAGEMENT

The Controller’s Management Board meets monthly and reviews the Risk Register to ensure compliance. The Risk Committee reviews the Risk Management Policy and Register at each meeting. Areas of significant risk are reported to Council at each meeting. Council then seeks assurance from the Controller that all mitigating action is being or has been taken. In addition, Council formally approved the appointment of Mazars LLP as internal auditors and agreed a risk-focused internal audit plan with them, covering a variety of areas (including finance) across the organisation. The reviews have identified that financial sustainability is the main financial risk for both the Charity and its subsidiaries.

PRINCIPAL RISKS AND UNCERTAINTIES ARE MANAGED BY:

• detailed contract planning. A principal financial risk facing the Charity’s subsidiary, SSAFA Family Health Services, is related to the expiry of the contract with the MOD to provide healthcare to HM Forces in Germany following the drawdown of personnel back to the UK. The Company’s Board is monitoring the situation and continuing to look for new opportunities;

• the impact of the Covid-19 crisis. Trustees consider that the Charity is well-placed to face the challenges posed by the crisis, and has taken measures such as securing a loan facility through the Coronavirus Business Interruption Loan Scheme, taking advantage of the Coronavirus Job Retention Scheme and reduction of some staff hours. Whilst fundraising income has been impacted, a significant element of the group’s income derives from contracts to the MOD which are unaffected.

• ensuring that branches’ and committees’ volunteers have appropriate financial and other training and support available to them to aid them with the raising, recording, monitoring and the distributing of funds in delivering assistance to SSAFA’s many beneficiaries.

The Group has some transaction and currency exchange rate risk given its international spread of activities. The objective of the Group in managing its liquidity risk is to ensure that it can meet its liabilities when they fall due. The Group expects to meet its financial obligations through operating cash flows. In the event that operating cash flows would not cover all the Group’s financial obligations, Council is comfortable that suitable credit facilities are available.

The Group may offer credit terms to its customers which allow payment of the debt after delivery of the goods or services. Certain Group entities are subject to a risk to the extent that a customer may be unable to pay the debt on the specified due date. This risk is mitigated by strong on-going customer relationships.

Council is content that measures are in hand to manage and minimise all significant risks.

AUDITOR

Trustees believe it is good practice to re-evaluate their professional advisers periodically but have also informed Moore Kingston Smith LLP that its proposals to be re-appointed will be welcomed.

TRUSTEES’ RESPONSIBILITIES STATEMENT

The Trustees are responsible for preparing the annual Trustees’ Report and the financial statements in accordance with applicable law and regulations.

The Charities Act 2011 and regulations made thereunder,

the Charities and Trustee Investment (Scotland) Act 2005 and regulation 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended), the Charities Act 1962-12 (Gibraltar) and the Charities Act 2009 (Republic of Ireland) require the Trustees to prepare financial statements for each financial year.

The Trustees have to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland. The Trustees must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Charity and the Group, and of the incoming resources and application of resources, including the income and expenditure, of the Group for that period.

In preparing these financial statements the Trustees are required to:

The Trustees are responsible for keeping adequate accounting records that are sufficient to show and explain the Charity’s and Group’s transactions, and disclose with reasonable accuracy at any time the financial position of the Charity and the Group and enable them to ensure that the financial statements comply with the Charities Act 2011 and regulations

made thereunder, the Charities and Trustee Investment (Scotland) Act 2005 and regulation 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended), the Charity (Accounts and Reports) Regulations 2008, the Charities Act (Gibraltar) 1962-12 , the Charities Act 2009 (Republic of Ireland) and the provisions of the trust deed. They are also responsible for safeguarding the assets of the Charity and the Group and, hence, for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Trustees are responsible for the maintenance and integrity of the Charity and financial information included on the Charity’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Approved by Council on 22 June 2021 And signed on 22 June 2021 by

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~~INDEPENDENT AUDITOR’S REPORT~~

To the Trustees of The Soldiers’, Sailors’, Airmen’s and Families’ Association – Forces Help (SSAFA)

other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

OPINION

We have audited the financial statements of SSAFA, the Armed Forces charity (the ‘parent charity’) and its subsidiaries (the ‘group’) for the year ended 31 December 2020 which comprise the Group Statement of Financial Activities, the Charity Statement of Financial Activities, the Group and Parent Charity Balance Sheets, the Group Cash Flow Statement and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

CONCLUSIONS RELATING TO GOING CONCERN

In auditing the financial statements, we have concluded that the Trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the parent charity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

In our opinion the financial statements:

Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.

OTHER INFORMATION

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The Trustees are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we

BASIS FOR OPINION

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs(UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent charity in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our

have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

MATTERS ON WHICH WE ARE REQUIRED TO

REPORT BY EXCEPTION

In the light of the knowledge and understanding of the group and parent charity and its environment obtained in the course of the audit, we have not identified material misstatements in the Trustees’ annual report.

We have nothing to report in respect of the following matters where the Charities Act 2011 or the Charities Accounts (Scotland) Regulations 2006 (as amended) require us to report to you if, in our opinion:

RESPONSIBILITIES OF TRUSTEES

As explained more fully in the Trustees’ Responsibilities Statement set out on page 17, the Trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Trustees are responsible for assessing the group’s and parent charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the group or parent charity or to cease operations, or have no realistic alternative but to do so.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

We have been appointed as auditor under sections 151 of the Charities Act 2011 (England and Wales), 50 of the Charities Act 2009 (Republic of Ireland) and 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with regulations made under those Acts.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of noncompliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

EXPLANATION AS TO WHAT EXTENT THE AUDIT WAS CONSIDERED CAPABLE OF DETECTING IRREGULARITIES, INCLUDING FRAUD

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the parent charity.

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Our approach was as follows:

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

misrepresentations, or the override of internal control.

• Conclude on the appropriateness of the Trustees’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group and parent charity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or parent charity to cease to continue as a going concern.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit report.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

USE OF OUR REPORT

This report is made solely to the Charity’s Trustees, as a body, in accordance with Section 154 of the Charities Act 201, Section 50(1) of the Charities Act 2009 (Republic of Ireland), and section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005. Our audit work has been undertaken so that we might state to the Charity’s Trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Charity and its Trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Date: 24 June 2021

Moore Kingston Smith LLP

Statutory Auditor

Date: June 2021

Devonshire House

60 Goswell Road

London EC1M 7AD

Moore Kingston Smith LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006.

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~~CONSOLIDATED STATEMENT~~ OF FINANCIAL ACTIVITIES

FOR THE YEAR ENDED 31 DECEMBER 2020

FOR THE YEAR ENDED 31 DECEMBER 2020
**Notes ** Unrestricted
Funds		 Restricted
Funds
Total
2020
Unrestricted
Funds
2019
Restricted
Funds
2019
Total
2019
£’000 £’000 £’000
£’000
£’000
£’000
INCOME FROM:
Donations and legacies 1 7,043 2,872
9,915
6,913
1,809
8,722
Charitable activities
Contributions — Service/other charities 2 - 10,441
10,441
-
13,188
13,188
Health and welfare 2 8,799 575
9,374
14,887
654
15,541
Care and accommodation 2 452 500
952
620
516
1,136
Adoption services 2 328 -
328
368
-
368
Total charitable activities 9,579 11,516
21,095
15,875
14,358
30,233
Other trading activities
Fundraisingactivities 960 26
986
2,365
10
2,375
Commercial activities 438 -
438
413
-
413
Total trading activities 1,398 26
1,424
2,778
10
2,788
Investments 3 1,556 82
1,638
1,542
113
1,655
Other income 4 407 -
407
1,287
-
1,287
Total income 19,983 14,496
34,479
28,395
16,290
44,685
EXPENDITURE ON:
Raising funds
Fundraisingactivities 5 1,626 -
1,626
2,283
-
2,283
Raisingvoluntaryincome 5 756 -
756
757
-
757
Other trading activities 5 95 -
95
119
-
119
Total raising funds 2,477 -
2,477
3,159
-
3,159
Charitable activities
Supportingclients 5 7,498 12,684
20,182
10,432
14,855
25,287
Health and welfare 5 7,125 524
7,649
12,818
609
13,427
Care and accommodation 5 1,412 535
1,947
1,800
521
2,321
Adoption services 5 382 250 632
463
274
737
Total cost of charitable activities 16,417 13,993 30,410
25,513
16,259
41,772
Total expenditure 18,894 13,993
32,887
28,672
16,259
44,931
Netgains on investments 10 1,070 124
1,194
3,062
340
3,402
Net income before fund transfers 2,159 627
2,786
2,785
371
3,156
Transfer between funds 15 51 (51) -
45
(45)
-
Other recognised gains and losses
Actuarial(losses)/ gains on defned beneftpension 21 (14,661) -
(14,661)
4,391
-
4,391
Net movement in funds (12,451) 576
(11,875)
7,221
326
7,547
RECONCILIATION OF FUNDS
Total funds brought forward 15 46,806 6,952
53,758
39,585
6,626
46,211
Total funds carried forward 15 34,355 7,528
41,883
46,806
6,952
53,758

~~CHARITY STATEMENT OF~~ FINANCIAL ACTIVITIES

FOR THE YEAR ENDED 31 DECEMBER 2020

FOR THE YEAR ENDED 31 DECEMBER 2020
**Notes ** Unrestricted
Funds		 Restricted
Funds
Total
2020
Unrestricted
Funds
2019
Restricted
Funds 2019
Total
2019
£’000 £’000 £’000
£’000
£’000
£’000
INCOME FROM:
Donations and legacies 1 8,876 2,605
11,481
8,335
1,780
10,115
Charitable activities
Contributions — service/other charities 2 - 10,441
10,441
-
13,188
13,188
Health and welfare 2 - 575
575
-
654
654
Care and accommodation 2 452 500
952
620
516
1,136
Adoption services 2 328 -
328
368
-
368
Total charitable activities 780 11,516 12,296
988
14,358
15,346
Other trading activities — Fundraising 942 24
966
2,326
10
2,336
Investments 3 1,555 82
1,637
1,540
113
1,653
Other income 4 6,027 -
6,027
11,375
-
11,375
Total income 18,180 14,227 32,407
24,564
16,261
40,825
EXPENDITURE ON:
Raising funds
Fundraisingactivities 5 1,623 -
1,623
2,243
-
2,243
Raisingvoluntaryincome 5 753 -
753
754
-
754
Total raising funds 2,376 -
2,376
2,997
-
2,997
Charitable activities
Supportingclients 5 6,862 12,584 19,446
9,070
14,789
23,859
Health and welfare 5 1,369 524
1,893
1,226
609
1,835
Care and accommodation 5 1,410 535
1,945
1,799
521
2,320
Adoption services 5 380 250
630
462
274
736
Total cost of charitable activities 10,021 13,893
23,914
12,557
16,193
28,750
Other expenditure 5 4,817 - 4,817
9,300
-
9,300
Total expenditure 17,214 13,893
31,107
24,854
16,193
41,047
Netgains on investments 10 1,070 124
1,194
3,062
340
3,402
Net income before fund transfers 2,036 458 2,494
2,772
408
3,180
Transfers between funds 15 51 (51) -
45
(45)
-
Other recognisedgains and losses
Actuarial(losses)/gains on defned beneftpension 21 (14,661) - (14,661)
4,391
-
4,391
Net movement in funds (12,574) 407 (12,167)
7,208
363
7,571
RECONCILIATION OF FUNDS
Total funds brought forward 15 46,535 6,919 53,454
39,327
6,556
45,883
Total funds carried forward 15 33,961 7,326 41,287
46,535
6,919
53,454

The Charity Statement of Financial Activities includes all gains and losses recognised in the year.

All incoming resources and resources expended derive from continuing activities.

The Consolidated Statement of Financial Activities includes all gains and losses recognised in the year.

All incoming resources and resources expended derive from continuing activities.

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ssafa.org.uk 23

~~CONSOLIDATED STATEMENT OF CASH FLOWS~~

~~CONSOLIDATED GROUP AND~~ CHARITY BALANCE SHEETS

FOR THE YEAR ENDED 31 DECEMBER 2020

FOR THE YEAR ENDED 31 DECEMBER 2020

Notes Group
Group
Charity		 Charity
As at 31 December 2020
£’000
2019
£’000
2020
£’000		 2019
£’000
FIXED ASSETS
Tangible assets 11 9,530
11,293
9,529		 11,293
Investments 12 38,353
34,804
38,363		 34,814
Investment injoint venture 12 3
2
-		 -
Total fxed assets 47,886
46,099
47,892		 46,107
CURRENT ASSETS
Debtors 13 4,027
2,887
4,049		 2,993
Stock 42
38
-		 -
Cash at bank and in hand 10,863
10,794
9,966		 9,697
14,932
13,719
14,015		 12,690
-
Creditors: Amounts falling due within oneyear 14 (3,849)
(4,354)
(3,534)		 (3,637)
Net current assets 11,083
9,365
10,481		 9,053
Net assets excluding pension liability 58,969
55,464
58,373		 55,160
Defned beneftpension scheme liability 21 (17,086)
(1,706)
(17,086)		 (1,706)
NET ASSETS 16 41,883
53,758
41,287		 53,454
FUNDS
Unrestricted funds —general 15 49,813
46,845
49,419		 46,574
Unrestricted funds — designated 15 1,628
1,667
1,628		 1,667
Unrestricted funds —pension reserve 15 (17,086)
(1,706)
(17,086)		 (1,706)
Total unrestricted funds 15 34,355
46,806
33,961		 46,535
Restricted funds 15 7,528
6,952
7,326		 6,919
TOTAL FUNDS 15 41,883
53,758
41,287		 53,454

Approved by Council on 22 June 2021 and signed on 22 June 2021 by:

Notes 2020 2019
£’000 £’000
Net cash used in operating activities A (849) (2,165)
Cash fows from investing activities
Dividends, interest and rents from investments 3 1,638 1,655
Purchase of tangible fxed assets 11 - (58)
Proceeds on disposal of fxed assets 1,635 3,012
Purchase of investments 12 (3,505) (5,500)
Proceeds from sale of investments 10,12 1,150 -
Net cash used in investing activities 918 (891)
Change in cash and cash equivalents in theyear 69 (3,056)
Cash and cash equivalents at 1 January2020 10,794 13,850
Cash and cash equivalents at 31 December 2020 10,863 10,794
Notes to the Consolidated Statement of Cash Flows 2020
£’000		 2019
£’000
A. Reconciliation of net expenditure to net cash fow from operating activities
Net income for theyear 2,786 3,156
Adjustments for:
Depreciation 11 192 185
Proft on disposal of fxed assets 4 (64) (1,280)
Gains on investments 12 (1,194) (3,402)
Dividends, interest and rents from investments (1,638) (1,655)
Increase in stock (4) (2)
Decrease in creditors 14 (505) (675)
Pension contributions (568) (1,260)
Change inpension liability 21 1,286 1,854
(Increase)/decrease in debtors 13 (1,140) 914
Net cash used in operating activities (849) (2,165)

Lt General Sir Gary Coward KBE CB Mr David Rowe Chairman Honorary Treasurer

The accompanying accounting policies and notes on pages 26 to 48 form an integral part of these financial statements.

2020 2019
£’000 £’000
B. Analysis of cash and cash equivalents
Cash at bank and in hand 10,863
10,794

The group has no net debt and therefore no net debt note is presented.

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ssafa.org.uk 25

~~PRINCIPAL ACCOUNTING POLICIES~~

The principal accounting policies are summarised below

consolidated financial statements on a receipts and payments basis but adjusted for any accruals or prepayments where material.

BASIS OF PREPARATION

The consolidated financial statements have been prepared under the historical cost convention, with items recognised at cost or transaction value unless otherwise stated in the relevant note(s) to these accounts. The financial statements have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019) second edition issued October 2019 and the Financial Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) and the Charities Act 2011.

CHARITY STATEMENT OF CASH FLOWS

The Trustees have taken the exemption available under Para 1.11 of FRS 102 not to present a separate Charity Statement of Cash Flows.

GOING CONCERN

The financial statements have been prepared on the basis that the Charity is a going concern. The Trustees consider that there are no material uncertainties about the Charity’s ability to continue as a going concern. The Trustees accept the legal necessity to include the longterm FRS 102 defined pension scheme liability within the financial statements. The Charity had £51.4 million in unrestricted funds at 31 December 2020, excluding the FRS 102 pension liability. The Trustees therefore consider that the Charity has adequate resources to sustain operations for the foreseeable future.

The accounts (financial statements) have been prepared to give a ‘true and fair’ view and have departed from the Charities (Accounts and Reports) Regulations 2008 only to the extent required to provide a ‘true and fair view’. This departure has involved following Accounting and Reporting by Charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019) second edition issued October 2019 rather than the Accounting and Reporting by Charities: Statement of Recommended Practice effective from 1 April 2005 which has since been withdrawn.

The Trustees have considered the impact of the Covid-19 crisis on the future of the Charity. Whilst fundraising income has suffered as a result, the Charity has taken steps to ensure it can continue to serve its beneficiaries including taking advantage of the Coronavirus Job Retention Scheme and securing a loan facility through the Coronavirus Business Interruption Loan Scheme. Thus they continue to adopt the going concern basis of accounting in preparing the financial statements.

The financial statements are prepared in the Group’s functional currency, Sterling (£) and are stated in £’000s.

The Charity constitutes a public benefit entity as defined by FRS 102.

The consolidated financial statements include the Group’s share of the income and net assets of a joint venture operated through a limited liability partnership which exists for the performance of a contract which expired in 2020.

BASIS OF CONSOLIDATION

The financial statements consolidate those of the Charity, its subsidiary undertakings and its shares in joint ventures drawn up to 31 December each year. The results and balance sheets of the subsidiaries controlled by the Charity have been consolidated on a line by line basis. Control is achieved where the Charity has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. All intragroup transactions, balances, income and expenses are eliminated in full on consolidation.

INCOME

All income whether restricted or unrestricted is recognised in the Consolidated Statement of Financial Activities when the Group has entitlement to the funds, the amount can be quantified reliably and it is probable that the income will be received.

Branch and committee accounts (including those overseas) have been included in the Charity’s and

Donations and other income generated from

fundraising are recognised gross on a receivable basis. In the event that the donation is subject to conditions that require a level of performance before the Charity is entitled to the funds, the income is deferred and not recognised until either those conditions are fully met or the fulfilment of those conditions is wholly within the control of the Charity and it is probable that those conditions will be fulfilled in the reporting period.

Donated services and gifts in kind are recognised as income when the Charity has control over the item or service, any conditions associated have been met, the receipt of economic benefit from the use by the Charity is probable and when economic benefit can be measured reliably. In accordance with the Charities SORP (FRS 102), the time of the Charity’s many volunteers is not recognised. However, refer to the annual Trustees’ Report for details of their substantial contribution to the Charity.

Legacies are recognised once the receipt of the legacy becomes probable and quantifiable. Pecuniary legacies are usually recognised at the point that probate is granted. For residuary legacies, this will usually be at the earlier of cash receipt or when confirmation has been received from the representatives of the estates that payment will be made or property will be transferred and once all the conditions attaching to the legacies have been fulfilled. Where legacies have been notified to the Charity, or the Charity is aware of the granting of probate but the criteria for income recognition have not been met, then the legacy is treated as a contingent asset and disclosed if material (see note 17).

Investment income is recognised when receivable.

Grants receivable from service funds and other charities for specific cases, which have not been almonised at the end of the year, are accrued and included as current liabilities. These amounts will be paid in the following year or returned to the relevant providers.

Income generated from providing health services to the NHS arises from a number of fixed-term contracts for which income is recognised as earned.

Fundraising income arises from a mixture of events and activities undertaken on a central and branch-wide basis and is recognised when receivable.

Health and welfare includes income generated from the provision of health and social care services to British

Forces personnel and their dependants around the world. In calculating revenue on contracts, the Group makes certain estimates in respect to the compliance with performance-related indicators which the contracts are subject to. A different assessment may result in a different value being determined for revenue.

Care and accommodation income is generated through the provision of these services to the Charity’s beneficiaries at a number of residential homes and cottages held by the Charity, and income from residential fees and other services is recognised when the income has been earned.

Adoption income arises through the provision of an adoption agency service for placing children with military families and is recognised when placements have been secured.

Other income includes government grants of £324,000 received in respect of furloughed employees under the Coronavirus Job Retention Scheme.

EXPENDITURE AND THE BASIS OF ALLOCATION OF COSTS

Expenditure is recognised once there is a legal or constructive obligation to make a payment to a third party, it is probable that settlement will be required and the amount of the obligation can be measured reliably. All expenditure is accounted for on an accruals basis. All expenses including support costs and governance costs are allocated or apportioned to the applicable expenditure headings within the costs of raising funds and charitable activities. Where costs cannot be directly attributed, they have been allocated to activities on a basis consistent with the use of resources. Direct costs, including directly attributable salaries, are allocated on an actual basis to the key strategic areas of activity.

Costs of raising funds are those incurred in attracting voluntary income (including through the holding of events, appeals and other fundraising initiatives), and those incurred in generating income from trading activities.

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COSTS OF CHARITABLE ACTIVITIES INCLUDE THE FOLLOWING:

Grant payments made to or on behalf of individuals in the furtherance of the Charity’s charitable object.

Grant-aided activities relate to costs associated with providing health and social care services to British Forces personnel and their dependants in far commands.

Health and welfare expenditure includes the direct costs of the welfare department at central office, with allocated communication and marketing costs, volunteer support costs (including training), branch and committee case work costs and branch office and staff costs in the provision of advice and assistance to those in need. This expenditure relates to the core services to British Forces personnel and their dependents around the world. Direct expenditure incurred in the Charity’s subsidiary, The Military Wives Choirs Foundation, is also included within this category of expenditure.

Care and accommodation expenditure primarily relates to the running costs of the Charity’s homes and other accommodation, and the care services provided to the Charity’s beneficiaries therein.

Adoption expenditure relates to staff and sessional staff costs together with departmental running costs and facilitation of the Adoption Panel.

Support costs include central functions, such as management, finance, human resources and information technology. Governance costs are those associated with running the Charity, including Council and Committee expenses, audit and other costs associated with constitutional and statutory

requirements. Support and governance costs are allocated across the categories of costs on the basis of staff numbers engaged in the activities therein as shown in note 6. The administrative charges for the provision of grant-aided activities and the provision of health and welfare services are calculated in accordance with the contractual agreements and directly charged to the relevant cost categories.

TANGIBLE FIXED ASSETS AND DEPRECIATION

Tangible fixed assets (excluding investment properties) are stated at cost and depreciated in equal instalments from either the date of purchase or the date brought into use at the following rates:

Land Nil
Freehold buildings 50 years
Long leasehold buildings 50 years
Furniture and fittings 5 years
IT equipment 3 years
Motor vehicles down to 10% Over 3 years

Additions to furniture, fittings and IT equipment valued at less than £2,000 are fully written off as revenue expenditure in the year of purchase unless they form part of a larger-scale project.

INVESTMENT PROPERTIES

Investment properties for which fair value can be measured reliably on an ongoing basis are measured at fair value annually with any change being recognised in the Consolidated Statement of Financial Activities.

IMPAIRMENT OF ASSETS

At each year end, fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared to its carrying amount. If the estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in the Statement of Financial Activities.

If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of

the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in the Consolidated Statement of Financial Activities.

INVESTMENTS

Listed investments are included at bid price (which is deemed to be market value) at the balance sheet date and the Consolidated Statement of Financial Activities shows net investment gains and losses arising from revaluation of the investment portfolio and disposals during the year. Realised gains and losses on investments are calculated as the difference between the sales proceeds and their market value at the start of the year or their subsequent cost and are charged or credited to the Statement of Financial Activities in the year of disposal. Unrealised gains and losses represent the movement in market values during the year and are credited or charged to the Statement of Financial Activities based on market value at the year end.

Investments in subsidiaries are held at cost less impairment in the individual Charity financial statements.

Entities in which the Group holds an interest and which are jointly controlled by the Group and one or more other ventures under a contractual arrangement are treated as joint ventures. In the Group financial statements, joint ventures are accounted for using the equity method.

Joint ventures are recognised initially in the Consolidated Statement of Financial Activities at the transaction price, and subsequently adjusted to reflect the Group’s share of total comprehensive income and equity of the joint venture, less any impairment. Losses in excess of the carrying amount of an investment in a joint venture are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the joint venture.

FINANCIAL INSTRUMENTS

Both Group and Charity have only financial assets and financial liabilities of a kind that qualify as basic financial instruments.

DEBTORS

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

CREDITORS AND PROVISIONS

Short term trade creditors are measured at the transaction price, other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, and it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value using an appropriate discount rate. The unwinding of the discount is recognised as a finance cost in the surplus or deficit in the period it arises.

28 ANNUAL REPORT AND ACCOUNTS 2020

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FUNDS ACCOUNTING

Unrestricted funds

General funds are unrestricted funds that are available for use at the discretion of Council in furtherance of the objectives of the Charity.

Designated funds are unrestricted funds set aside at the discretion of Council for specific purposes. Details of designated funds held are given in note 15.

A pension reserve is shown separately within unrestricted funds to reflect the long-term, non-liquid nature of the pension liability.

Restricted funds

Restricted funds are those donated for use in a particular area or for specific purposes, the use of which is restricted to that area or purpose and the restriction means that the related funds can only be used for the specific activities. Details of restricted funds held are given in note 15.

Except for The Royal Homes fund, no interest on cash balances is allocated to restricted funds, and no overheads or support costs are allocated except where material costs are incurred by a specific fund. Interest earned on restricted funds and most overhead and support costs if reasonably allocated are considered to be of low value. For both unrestricted and restricted funds, both the income and any investment gain or loss have been allocated to the individual funds holding the investment.

Any Gift Aid recovered on donations is treated as part of the related gift in either unrestricted or restricted funds respectively, unless the donor or the terms of the appeal have specified otherwise.

OPERATING LEASES

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risk and rewards of ownership of the leased assets to the Group. All other leases are classified as operating leases. Rentals payable under operating leases are charged to the Consolidated Statement of Activities on a straight-line basis over the lease term, unless the rental payments are structured to increase in line with expected general inflation, in which case the Group recognises annual rent expense equal to amounts owed to the lessor.

FOREIGN CURRENCY

The individual financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purposes of the consolidated financial statements, the results and financial position are presented in Sterling (£).

In preparing the financial statements of the individual entities, transactions in currencies other than the functional currency of the individual entities (foreign currencies) are recognised at the spot rate at the dates of the transactions, or at an average rate where this rate approximates to the actual rate at the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary items that are measured in terms of the historical cost in a foreign currency are not retranslated.

Exchange differences are recognised in the Consolidated Statement of Financial Activities in the period in which they arise.

CONTRIBUTIONS TO PENSION SCHEMES

The Group operates a defined benefit pension scheme that requires contributions to be made to a separately administered fund.

Scheme assets are measured at fair values. Scheme liabilities are measured annually on an actuarial basis using the projected unit method, and are discounted at appropriate high-quality corporate bond rates of equivalent currency and term of the scheme liabilities. The net surplus or deficit is presented separately from other net assets on the balance sheet. A net surplus is recognised only to the extent that it is recoverable by the Group.

The current service cost and costs from settlements and

curtailments are charged against operating surplus. Past service costs are recognised over the period in which the benefit changes vest.

Interest on the scheme liabilities and the expected return on scheme assets are included in net interest payable.

The discount rate for the liabilities and the expected return on the assets is the same and is based on yield curve of high-quality corporate bonds.

Actuarial gains and losses are reported as recognised gains and losses in the Consolidated Statement of Financial Activities.

The Group also operates defined contribution schemes which are multi-employer schemes for which the assets and liabilities cannot be identified separately for the Group members. Pension costs charged in the Consolidated Statement of Financial Activities represent the contributions payable by the Group in the year.

TAXATION

The Charity is exempt from tax on income and gains falling within section 505 of the Taxes Act 1988 or section 252 of the Taxation of Chargeable Gains Act 1992 to the extent that these are applied to its charitable object.

SIGNIFICANT JUDGEMENTS AND ESTIMATES

In the application of the Group’s accounting policies, which are described above, Council are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.

CRITICAL JUDGEMENTS IN APPLYING THE GROUP’S ACCOUNTING POLICIES

NHS defined benefit pension scheme

The Group does not have sufficient information to account reliably for its share of the defined benefit obligation and plan assets and has therefore accounted for the scheme as a defined contribution scheme.

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

Accrued legacy income

The Group adopts a prudent approach to accounting for legacies to which it is entitled but which have not been realised as cash. For those legacies where there is uncertainty surrounding the measurement of the assets due to a lack of estate accounts no provision is made. Where estate accounts exist but include properties which are not . All estate values are estimated net of administration fees of 5% (2019- 5%).

Defined benefit pension

The Charity estimates the pension liabilities to the members of the defined benefit local government scheme based on assessments set to market conditions at the year end. The estimates are sensitive to the discount rates and life expectancy assumptions. A discount rate change of 0.1% would result in a change in the valuation of the liability of £2 million and a 1 year change in the life expectancy would result in a change of £5 million.

Corporation tax is chargeable on the profits generated by the subsidiary companies. These liabilities are recorded in the subsidiary company financial statements and relief against liabilities claimed on distribution of the profits to the parent charity.

Irrecoverable value-added tax is allocated to the category of expenditure to which it relates.

30 ANNUAL REPORT AND ACCOUNTS 2020

ssafa.org.uk 31

~~NOTES TO THE FINANCIAL STATEMENTS~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

FOR THE YEAR ENDED 31 DECEMBER 2020

Unrestricted Restricted Total Unrestricted Restricted Total
Funds Funds 2020 Funds Funds 2019
1. DONATIONS AND LEGACIES £’000 £’000 £’000 £’000 £’000 £’000
Group
Donations 3,838 2,871 6,709 4,566 1,778 6,344
Legacies 3,205 1 3,206 2,347 31 2,378
7,043 2,872 9,915 6,913 1,809 8,722
Charity
Donations 5,671 2,604
8,275
5,988		 1,749 7,737
Legacies 3,205 1
3,206
2,347		 31 2,378
8,876 2,605
11,481
8,335		 1,780 10,115

FOR THE YEAR ENDED 31 DECEMBER 2020

Unrestricted Restricted
Total
Unrestricted		 Restricted Total
3. INCOME FROM INVESTMENTS Funds Funds 2020
Funds		 Funds 2019
Group £’000 £’000 £’000 £’000 £’000 £’000
Listed investments 886 82
968
739		 113 852
Bank deposits and unquoted investments 1 -
1
42		 - 42
Rental income 669 -
669
761		 - 761
Total investment income 1,556 82
1,638
1,542		 113 1,655
Charity
Listed investments 886 82 968 739 113 852
Bank deposits and unquoted investments - - - 40 - 40
Rental income 669 - 669 761 - 761
Total investment income 1,555 82 1,637 1,540 113 1,653

The Charity received donations from its subsidiary companies of £2,473,000 in respect of 2020 results (2019: £2,770,000).

Unrestricted Restricted
Total
Unrestricted
Restricted
Total
2. INCOME FROM CHARITABLE ACTIVITIES Funds Funds 2020
Funds
Funds
2019
Group £’000 £’000 £’000
£’000
£’000
£’000
Contributions from services and charities for individuals - 10,441 10,441
-
13,188
13,188
Communityhealth and social services — UK and overseas - 575
575
-
654
654
Health and welfare contracts incl share ofjoint venture 8,799 -
8,799
14,887
-
14,887
Group health and welfare 8,799 575
9,374
14,887
654
15,541
Care and accommodation contributions
SteppingStone Homes 239 -
239
222
-
222
Residential homes and cottages 126 -
126
310
-
310
Homes from Home - -
3
-
3
Royal Homes - 500
500
-
516
516
Other 87 - 87
85
-
85
Group care and accommodation contributions 452 500
952
620
516
1,136
Adoption income 328 -
328
368
-
368
Total income from charitable activities 9,579 11,516
21,095
15,875
14,358
30,233
Charity
Contributions from services and charities for individuals - 10,441 10,441
-
13,188
13,188
Community health and social services — UK and overseas - 575 575
-
654
654
Care and accommodation contributions
SteppingStone Homes 239 -
239
222
-
222
Residential homes and cottages 126 -
126
310
-
310
Homes from Home - - -
3
-
3
Royal Homes - 500
500
-
516
516
Other 87 87
85
-
85
Charity care and accommodation contributions 452 500
952
620
516
1,136
Adoption income 328 -
328
368
-
368
Total income from charitable activities 780 11,516
12,296
988
14,358
15,346
Unrestricted Restricted
Total
Unrestricted		 Restricted Total
4. OTHER INCOME Funds Funds 2020
Funds		 Funds 2019
Group £’000 £’000 £’000 £’000 £’000 £’000
Disposal of fxed assets 64 - 64
1,280		 - 1,280
Coronavirus Job Retention Scheme 324 - 324
-		 - -
Other income 19 - 19
7		 - 7
Total other income 407 - 407 1,287 - 1,287
Charity
Disposal of fxed assets 64 - 64
1,280		 - 1,280
Management charges to subsidiaryundertakings 837 - 837
795		 - 795
Salary charges recharged to subsidiary 4,827 - 4,827
9,300		 - 9,300
Coronavirus Job Retention Scheme 299 - 299
-		 - -
Total other income 6,027 -
6,027
11,375		 - 11,375
Activities Support
undertaken costs Total Total
5. EXPENDITURE directly (see note 6) 2020 2019
Group £’000 £’000 £’000 £’000
Raising funds
Fundraisingactivities 1,569 57 1,626
2,283
Raisingvoluntaryincome 72 684 756
757
Other tradingactivities 95 - 95
119
1,736 741
2,477
3,159
Charitable activities
Supporting clients 17,978 2,204
20,182
25,287
Provision of ‘Grant Aided’ activities 494 30
524
609
Health and welfare 6,303 822
7,125
12,818
Care and accommodation 1,530 417
1,947
2,321
Adoption services 423 209
632
737
26,728 3,682 30,410 41,772
Total resources expended 28,464 4,423 32,887
44,931

32 ANNUAL REPORT AND ACCOUNTS 2020

ssafa.org.uk 33

~~NOTES TO THE FINANCIAL STATEMENTS~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

FOR THE YEAR ENDED 31 DECEMBER 2020

Activities Support
undertaken costs Total
Total
5. EXPENDITURE Cont. directly (see note 6) 2020
2019
Charity £’000 £’000 £’000
£’000
Raising funds
Fundraisingactivities 1,566 57 1,623
2,243
Raisingvoluntaryincome 72 681 753
754
1,638 738
2,376
2,997
Charitable activities
Supportingclients 17,254 2,192
19,446
23,859
Provision of 'Grant Aided' activities 494 30
524
609
Health and welfare 547 822
1,369
1,226
Care and accommodation 1,530 415
1,945
2,320
Adoption services 423 207
630
736
20,248 3,666
23,914
28,750
Other expenditure -payroll costs for subsidiarycompanies 4,817 - 4,817
9,300
Total resources expended 26,703 4,404 31,107
41,047

Fundraising includes the cost of ‘attracting’ all voluntary income into the Charity.

Unrestricted Restricted
Total
Unrestricted		 Restricted Total
SUPPORTING CLIENTS - WELFARE AND GRANTS PAYABLE Funds Funds 2020
Funds		 Funds 2019
Group £’000 £’000 £’000 £’000 £’000 £’000
Casework 6,734 12,354
19,088
9,284		 14,609 23,893
Specialist services 434 230
664		 769 180 949
MilitaryWives Choirs 330 100
430		 378 66 445
7,498 12,684
20,182
10,432		 14,855 25,287
Unrestricted Restricted
Total
Unrestricted		 Restricted Total
SUPPORTING CLIENTS - WELFARE AND GRANTS PAYABLE Funds Funds 2020
Funds		 Funds 2019
Charity £’000 £’000 £’000 £’000 £’000 £’000
Casework 6,428 12,354
18,782
8,301		 14,609 22,910
Specialist services 434 230
664
769		 180 949
6,862 12,584
19,446
9,070		 14,789 23,859

All grants were paid to or on the behalf of eligible individuals.

FOR THE YEAR ENDED 31 DECEMBER 2020

6. SUPPORT COSTS
Management
£’000
Finance
£’000
Human
Resources
£’000
Information
Technology
£’000
Facilities
£’000
Governance
£’000
Total
2020
£’000
Total
2019
£’000
Group		 6. SUPPORT COSTS
Management
£’000
Finance
£’000
Human
Resources
£’000
Information
Technology
£’000
Facilities
£’000
Governance
£’000
Total
2020
£’000
Total
2019
£’000
Group
Raising funds
130
103
118
170
181
39
741
724
Charitable activities
Grantspayable
386
307
351
507
538
115
2,204
1,801
Care and accommodation
73
58
66
96
102
22
417
530
Adoption
37
29
33
48
51
11
209
212
Total charitable activities
626
497
568
821
872
187
3,571
3,267
Health and welfare services
822
780
Grant-aided activities
30
30
Total support costs
4,423
4,077
Management
£’000
Finance
£’000
Human
Resources
£’000
Information
Technology
£’000
Facilities
£’000
Governance
£’000
Total
2020
£’000
Total
2019
£’000
Charity		 Management
£’000
Finance
£’000
Human
Resources
£’000
Information
Technology
£’000
Facilities
£’000
Governance
£’000
Total
2020
£’000
Total
2019
£’000
Charity
Raising funds
130
100
118
170
181
39
738
721
Charitable activities
1,796
Grantspayable
386
295
351
507
538
115
2,192
1,796
Care and accommodation
73
56
66
96
102
22
415
529
Adoption services
37
27
33
48
51
11
207
211
626
478
568
821
872
187
3,552
3,257
Health and welfare services
822
780
Grant-aided activities
30
30
Total support costs
4,404
4,067

The administrative charges for the provision of ‘grant-aided’ activities and the provision of health and welfare services charge include support costs and are calculated in accordance with the contract agreements.

2020 2019
Governance costs include: £’000 £’000
Council/Committee expenses 5 10
AGM - 7
Annual reports 6 6
Audit 65 92
Legal andprofessional 57 53
Apportionment of employee costs 54 79
187
247

34 ANNUAL REPORT AND ACCOUNTS 2020

ssafa.org.uk 35

~~NOTES TO THE FINANCIAL STATEMENTS~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

FOR THE YEAR ENDED 31 DECEMBER 2020

FOR THE YEAR ENDED 31 DECEMBER 2020
7. NET EXPENDITURE 2020 2019
This is stated after charging/(crediting):
Feespayable to the Charity’s auditor
Audit of the Charity’s accounts
Audit of subsidiaries andjoint venture		 £’000
34
31		 £’000
46
46
Total audit fees 65 92
Non-audit fees: Taxation compliance services 14 11
Depreciation of tangible fxed assets 192 185
Expenditure on fxtures, ftiings & equipment written of
Proft on disposal of fxed assets		 165
(64)		 9
(1,280)
Amountspaid under operatingleases(see below) 28 116
2020 2019
The Group’s future minimum operating lease payments are as follows: £’000 £’000
Within oneyear
In two to fveyears inclusive		 15
-		 24
32
The Charity’s future minimum operating lease payments are as follows:
Within oneyear
In two to fve years inclusive		 2020
£’000
15
-		 2019
£’000
24
32
8. EMPLOYEE AND STAFF COSTS
Staf costs during the year were as follows:		 Non MOD
2020
£’000		 MOD
2020
£’000
Total
2020
£’000

Non MOD
2019
£’000		 MOD
2019
£’000		 Total
2019
£’000
Wages and salaries 7,190 3,630 10,820 6,644 5,468 12,112
Social securitycosts 866 890 1,756 657 523 1,180
Otherpension costs
Total staf costs		 411
8,467		 250
4,770		 661

13,237		 677

7,978		 1,513
7,504		 2,190
15,482
Agencylocums and other contractors 186 516 702
433		 981 1,414
Total labour costs 8,653 5,286 13,939 8,411 8,485 16,896

Redundancy costs of £447,000 (2019: £2,431,000) are included above. These are recognised when a constructive obligation arises.

In addition, a great amount of time is donated by thousands of volunteers throughout the world. Trustees and employees are extremely grateful for this support without which the Charity would be unable to provide such a comprehensive range of services to beneficiaries. Due to the costs involved in quantifying this the Trustees do not consider it possible to reflect this in the financial statements.

FOR THE YEAR ENDED 31 DECEMBER 2020

8. EMPLOYEE AND STAFF COSTS Cont.

8 higher-paid staff members are accruing retirement benefits under the defined contribution scheme, and 1 higher-paid staff under the defined benefit schemes, with 3 other higher-paid staff not participating in these schemes. (2019: 9 higher-paid employees participated in the defined contribution scheme and 3 higher paid employees participated in the defined benefit scheme, with 4 others not participating in these schemes). Contributions in the year for the defined contribution scheme for higher-paid staff amounted to £37,000 (2019: £36,000).

Higher-paid staff include medical personnel employed from the MOD and other NHS contracts, some of which were transferred under TUPE arrangements from the MOD.

The key management personnel of the Charity comprise the Controller and the members of the Management Board. The cost of employing management personnel for the Charity was therefore £722,000 (2019: £727,000).

The average number of UK contracted staff throughout the year for the Group and the Charity, analysed by activity, was:

MOD MOD
Non-MOD Contracts*
Total
Non-MOD		 Contracts* Total
2020 2020 2020
2019		 2019 2019
Number Number Number Number Number Number
Voluntaryincome 3 - 3
3		 - 3
Raisingfunds 41 - 41
36		 - 36
Grantspayable 116 - 116
101		 - 101
Care and accommodation 22 - 22
32		 - 32
Adoption services 11 - 11
10		 - 10
Health and welfare - 122 122
-		 158 158
Communityhealth/social service staf - ‘grant-aided’ activities - 11 11
-		 12 12
Management and support 28 - 28
32		 6 38
Total staf numbers 221 133
354
214		 176 390

9. Trustee REMUNERATION

Trustees are not remunerated. They are reimbursed expenses or amounts are paid on their behalf for attending meetings and duties directly related to their duties as Trustees.

In 2020 total expenses of £3,000 (2019: £9,000) were paid for 6 Trustees (2019 - 13).

Trustee indemnity insurance is held as part of a wider policy covering staff and volunteers. The premium for Trustee insurance cannot be separately identified but is estimated at £2,500 (2019: £2,500)

2020
2020
2020
2019		 2019 2019
10. NET GAINS/(LOSSES) ON INVESTMENTS Unrestricted
Restricted
Total
Unrestricted		 Restricted Total
Group and Charity £’000
£’000
£ ‘000
£’000		 £’000 £’000
Unrealisedgains on listed investments
Fair value adjustment on investment properties
Realisedgain on sale of leasehold investmentproperty		 1,227
124
1,351
2,036
(257)
-
(257)
1,026
100
-
100
-		 340
-
-		 2,376
1,026
-
Total netgains on investments 1,070
124
1,194
3,062		 340 3,402
Non MOD MOD
Total
Non MOD		 MOD Total
2020 2020
2020
2019		 2019 2019
The number of employees paid by the Charity whose Number Number Number Number Number Number
emoluments, excluding employer’s pension contributions,
exceeded £60,000 in the year were as follows:
£60,001 to £70,000 2 -
2
3		 - 3
£70,001 to £80,000 6 1
7
5		 1 6
£80,001 to £90,000 1 1
2
-		 1 1
£90,001 to £100,000 - 1
1
1		 2 3
£100,001 to £110,000 - 1
1
-		 1 1
£110,001 to £120,000 - -
-
-		 - -
£120,001 to £130,000 1 -
1
-		 - -
£130,001 to £140,000 - -
-		 1 1 2

36 ANNUAL REPORT AND ACCOUNTS 2020

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~~NOTES TO THE FINANCIAL STATEMENTS~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

FOR THE YEAR ENDED 31 DECEMBER 2020

Freehold Long leasehold Motor IT, furniture
Total
11. TANGIBLE FIXED ASSETS properties properties vehicles & equipment
£’000
Group £’000 £’000 £’000 £’000
Cost
At 1 January2020 11,454 1,268 65 1,180
13,967
Additions - - - -
-
Disposals (1,827) - (45) -
(1,872)
At 31 December 2020 9,627 1,268 20 1,180
12,095
Depreciation
At 1 January2020 1,131 381 57 1,105
2,674
Charge foryear 137 26 - 29
192
Eliminated on disposal (263) - (38) -
(301)
At 31 December 2020 1,005 407 19 1,134
2,565
Net book value
At 31 December 2020 8,622 861 1 46
9,530
At 31 December 2019 10,323 887 8 75
11,293

FOR THE YEAR ENDED 31 DECEMBER 2020

FOR THE YEAR ENDED 31 DECEMBER 2020
Group
Group
Charity		 Charity
12. INVESTMENTS 2020
2019
2020		 2019
Investments comprise: £’000
£’000
£’000		 £’000
Freehold investmentproperties 8,356
8,613
8,356		 8,613
Leasehold investmentproperties -
1,050
-		 1,050
Listed investments 29,997
25,141
29,997		 25,141
Investments in subsidiaries -
-
10		 10
38,353
34,804
38,363		 34,814
Investmentproperties at fair value Group
Freehold
£’000
Group
Leasehold
£’000
Charity
Freehold
£’000
Charity
Leasehold
£’000
As at 1 January 2020 8,613
1,050
8,613
1050
Revaluation (257)
-
(257)		 -
Disposal -
(1,050)
-		 (1,050)
As at 31 December 2020 8,356
-
8,356
-

The freehold investment property, a part of the freehold SSAFA Headquarters property was revalued at 31 December 2020, based on a valuation undertaken by Jones Lang Lasalle, an independent valuer with recent experience in the location and classes of the investment properties being valued. The valuation was prepared in accordance with the RICS Valuation - Professional Standards, January 2014 as published by the Royal Institution of Chartered Surveyors on the basis of Fair Value for current use. There are no restrictions on the realisabilityof the freehold property.

Freehold Long leasehold Motor IT, furniture
Total
properties properties vehicles & equipment £’000
Charity £’000 £’000 £’000 £’000
Cost
At 1 January2020 11,454 1,268 65 1,175
13,962
Additions - - - -
-
Disposals (1,827) - (45) - (1,872)
At 31 December 2020 9,627 1,268 20 1,175
12,090
Depreciation
At 1 January2020 1,131 381 57 1,100
2,669
Charge foryear 137 26 - 30
193
Eliminated on disposal (263) - (38) - (301)
At 31 December 2020 1,005 407 19 1,130
2,561
Net book value
At 31 December 2020 8,622 861 1 45
9,529
At 31 December 2019 10,323 887 8 75
11,293

All assets are owned by the Charity except for The Military Wives Choirs Foundation’s furniture and equipment of £1,000 ( 2019 - £nil) upon which depreciation of £1,000 ( 2019 - £nil) was charged.

As set out in note 3, property rental income earned during the year was £669,000 (2019: £761,000). The freehold investment property is leased out under operating leases and the leasehold investment property formed part of a wider contractual arrangement. Direct operating expenses arising on the freehold investment property generated rental income in the year of £ 130,000 ( 2018- £118,000). The Charity was additionally contractally obliged to carry out annual repairs and maintenance in respect of the leasehold investment property which in the current year amounted to £45,000 ( 2019 - £45,000) which is not subject to further recovery

At the balance sheet date, the Charity had contracted with tenants for the following future minimum lease payments:

2020 2019
£’000 £’000
Within oneyear 238
340
In two to fveyears inclusive 311
1,129
After fveyears -
251
Listed investments Total
£’000
Group:
Market value:
At 1 January2020 25,141
Acquisitions 3,505
Realised and unrealisedprofts on revaluation 1,351
At 31 December 2020 – Group 29,997
Investment in subsidiary 10
At 31 December 2020 – Charity 30,007
Historical cost at 31 December 2020 22,245

38 ANNUAL REPORT AND ACCOUNTS 2020

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~~NOTES TO THE FINANCIAL STATEMENTS~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

FOR THE YEAR ENDED 31 DECEMBER 2020

2020 2019
12. INVESTMENTS Cont. £’000 £’000
Listed investments are represented by:
Armed Forces CharityAuthorised Investment Fund Units 29,768
24,877
United Kingdom – Equities 229
264
29,997
25,141

Investments within the portfolio which amount to more than 5% of total holdings as at 31 December 2020 were:

Investments within the portfolio which amount to more than 5% of total holdings as at 31 December 2020 were:
2020 2019
£’000 £’000
Armed Forces Charity Authorised Investment Fund 29,768
24,877

Any charges made by the fund manager for managing the fund are deducted in arriving at the income or gains available for distribution and can not be separately identified. There are no restrictions on the realisation of these investments.

Subsidiary undertakings

As at the balance sheet date, the Charity owned the entire ordinary share capital (where applicable) of the following subsidiary undertakings:

Name Holding Activity
SSAFA Family Health Services Limited by guarantee Health and welfare services
SSAFA Forces Help Enterprises Limited 10,000 £1 ordinary shares Sale of merchandise
The Military Wives Choirs Foundation Limited by guarantee Military Wives and other choirs
SSAFA CMS Limited 100 £1 ordinary shares Casework management system

Details of the subsidiaries’ profit and loss accounts are as given below. These undertakings (excluding the charitable subsidiary) donate their taxable profits to the Charity each year.

The assets and liabilities of each subsidiary as extracted from the latest financial statements were:

SSAFA Family
SSAFA Forces Help		 Military Wives SSAFA CMS
Health Services
Enterprises Limited		 Choirs Foundation Limited
2020
2019
2020
2019		 2020
2019
2020		 2019
£’000
£’000
£’000
£’000		 £’000
£’000		 £’000 £’000
Total assets 806
1,361
357
418
491
299
89		 132
Total liabilities (616)
(1,258)
(148)
(224)		 (281)
(279)		 (88) (131)
190
103
209
194
210
20
1		 1
Represented by:
Share capital -
-
10
10
-
-
-		 -
Reserves 190
103
199
184
210
20
1		 1
190
103
209
194
210
20
1		 1
The results for theyear were:
Income 8,799
14,888
490
429
629
504
490		 979
Expenditure (6,566)
(12,841)
(148)
(230)		 (439)
(513)		 (490) (978)
Net income/(expenditure) 2,233
2,047
342
199
190
(9)		 - 1
Donation to charityunder Gift Aid (2,146)
(2,446)
(327)
(342)		 -
-
-		 -
Tax relief -
465
-
65
-
-		 - -
Reserves brought forward 103
37
184
262
20
29
1		 -
Retained in subsidiary 190
103
199
184
210
20
1		 1

FOR THE YEAR ENDED 31 DECEMBER 2020

12. INVESTMENTS Cont.

Joint venture

The provision of primary health care services in North West Europe are performed by the Charity’s joint venture, SSAFA GSTT Care LLP. The Group holds 50% of the capital of SSAFA GSTT Care LLP, held at a cost of £1 by SSAFA Family Health Services.

SSAFA GSTT
SSAFA GSTT
Care LLP Care LLP
A summary of the Group’s share of the joint venture: 2020 2019
£’000 £’000
Turnover 7,235
9,179
Expenditure (7,234) (9,179)
Proft/(loss) before and after tax 1
-
Current assets 49
442
Liabilities due within 1year (46) (440)

All income and expenditure through the joint venture are included in health and welfare activities as shown in the Group Statement of Financial Activities.

Group
Group
Charity		 Charity
2020
2019
2020		 2019
13. DEBTORS £’000
£’000
£’000		 £’000
Trade debtors 1,053
875
377
407
Amounts owed bysubsidiaryundertakings -
-
805
1,177
Amounts owed byrelated undertakings 45
307
-		 -
Other debtors 46
213
5
32
Prepayments and accrued income 2,883
1,492
2,862		 1,377
Total debtors 4,027
2,887
4,049
2,993

Amounts owed by Group undertakings are repayable on demand and no interest is payable. All amounts are due within one year.

Group
Group
Charity		 Charity
14. CREDITORS 2020
2019
2020		 2019
Amounts falling due within one year: £’000
£’000
£’000		 £’000
Trade creditors 478
543
449
339
Other tax and social security costs 555
526
508
459
Other creditors 107
211
107
210
Unalmonised grants 1,623
1,877
1,623
1,877
Accruals and deferred income 1,086
1,197
847
752
Total creditors 3,849
4,354
3,534
3,637

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~~NOTES TO THE FINANCIAL STATEMENTS~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

FOR THE YEAR ENDED 31 DECEMBER 2020

Balance at Incoming Resources Other Transfers Balance at
15. FUNDS 1 January 2020
£’000		 resources
£’000		 expended
£’000		 movements
£’000		 £’000 31 December
2020
£’000
General funds 46,845 19,965 (18,101) 1,053 51
49,813
Designated funds
Carmichael Walker Fund 380 18 (2) 17 - 413
Royal Patriotic Fund 1,287 - (72) - - 1,215
Total designated funds 1,667 18 (74) 17 - 1,628
Pension reserve (1,706) - (719) (14,661) - (17,086)
Total unrestricted funds 46,806 19,983 (18,894) (13,591) 51
34,355
Restricted funds
Welfare and casegrants 1,843 1,065 (1,420) 1 -
1,489
Housing 322 5 - - - 327
UK Armed Forces and other charities - 10,343 (10,343) - -
-
UK Armed Forces ‘grant-aided’ activities - 575 (524) - (51) -
The Royal Homes 1,927 552 (535) 74 - 2,018
Miscellaneous branch funds 2,109 194 (129) 49 - 2,223
Adoption services 250 100 (250) - - 350
Welfare funds 468 1,393 (692) - - 1,169
Total restricted funds — Charity 6,919 14,227 (13,893) 124 (51) 7,576
MilitaryWives Choirs Foundation 33 269 (100) - - 202
Total restricted funds -group 6,952 14,496 (13,743) 124 (51) 7,778
Total funds - Group 53,758 34,479 (32,887) (13,467) -
41,883
General funds
SSAFA FamilyHealth Services (103) (190)
SSAFA Forces HelpEnterprises Limited (194) (192)
SSAFA CMS Limited (1) (1)
Share ofjoint venture 2 (3)
MilitaryWives Choirs Foundation (8) (210)
Total funds — Charity 53,454 41,287

FOR THE YEAR ENDED 31 DECEMBER 2020

Balance at Incoming Resources Other
Balance at
15. FUNDS (continued) 1 January 2019
£’000		 resources
£’000		 expended
£’000		 movements
£’000		 31 December
2019
£’000
General funds 43,407 28,389 (28,015) 3,064 46,845
Designated funds
Carmichael Walker Fund 335 6 (4) 43 380
Royal Patriotic Fund 1,346 - (59) - 1,287
Total designated funds 1,681 6 (63) 43 1,667
Pension reserve (5,503) - (594) 4,391 (1,706)
Total unrestricted funds 39,585 28,395 (28,672) 7,498 46,806
Restricted funds
Welfare and casegrants 1,957 1,059 (1,177) 4 1,843
Housing 339 10 (27) - 322
UK Armed Forces and other charities - 13,149 (13,149) - -
UK Armed Forces ‘grant-aided’ activities - 654 (609) (45) -
The Royal Homes 1,669 568 (494) 184 1,927
Miscellaneous branch funds 1,967 249 (259) 152 2,109
Adoption services 274 250 (274) - 250
Welfare funds 350 322 (204) - 468
Total restricted funds — Charity 6,556 16,261 (16,193) 295 6,919
MilitaryWives Choirs Foundation 70 29 (66) - 33
Total restricted funds -group 6,626 16,290 (16,259) 295 6,952
Total funds - Group 46,211 44,685 (44,931) 7,793 53,758
General funds
SSAFA FamilyHealth Services (37) (103)
SSAFA Forces HelpEnterprises Limited (256) (194)
SSAFA CMS Limited - (1)
Share ofjoint venture 2 2
MilitaryWives Choirs Foundation (37) (8)
Total funds — Charity 45,883 53,454

Funds are held for use for the following purposes:

General funds

General funds are available for use at the discretion of Council to further the Charity’s objectives.

Designated funds

Carmichael Walker Fund — for use on charitable activities in the North East of England.

Royal Patriotic Fund — having accepted the funds and obligations of the Royal Patriotic Fund Corporation on 27 May 2011, the assets attaining have been designated for the purposes of the Royal Patriotic Fund Corporation.

Restricted Funds

Welfare and casegrants-includes funding received from the Armed Forces Covenant (LIBOR) Fund for four projects, Short Breaks, Mutual Support, Mental Health First Aid and Mentoring.

Homes from Home Appeal - to provide funding for families visiting injured servicemen and women at Norton House UK Armed Forces and other charities - contributions received from these bodies to provide grants to individuals for welfare purposes UK Armed Forces-Grant Aided - received under grant in aid to reimburse the costs incurred in the provision of Community Health and Social Services The Royal Homes - a charity providing residential facilities linked with the Charity’s activities under a Charity Commission Scheme in 1998 Miscellaneous branch funds - funds which have been received by branches for specific use in their local areas Welfare funds - income or capital received which may only be applied in the provision of welfare services to eligible individuals in need Included under this heading is The Aircrew Association Charitable Fund, a subsidiary charity.

42 ANNUAL REPORT AND ACCOUNTS 2020

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~~NOTES TO THE FINANCIAL STATEMENTS~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

FOR THE YEAR ENDED 31 DECEMBER 2020

FOR THE YEAR ENDED 31 DECEMBER 2020
16. ANALYSIS OF GROUP NET ASSETS BETWEEN FUNDS General
2020
Designated
2020
Restricted
2020
Total
2020
Fund balances at 31 December 2020 are represented by:
Tangible fxed assets
Investments
Net current assets
Defned beneftpension liability		 £’000
£’000
£’000
£’000
9,222
-
308
9,530
35,940
318
2,098
38,356
4,651
1,310
5,122
11,083
(17,086)
-
-
(17,086)
Total net assets between funds 32,727
1,628
7,528
41,883
General Designated Restricted Total
2019 2019 2019 2019
Fund balances at 31 December 2019 are represented by:
Tangible fxed assets		 £’000
10,982		 £’000
-		 £’000
311		 £’000
11,293
Investments 31,984 380 2,442 34,806
Net current assets 3,879 1,287 4,199 9,365
Defned beneftpension liability
Total net assets between funds		 (1,706)
45,139		 -
1,667		 -
6,952		 (1,706)
53,758

17. CONTINGENT ASSETS

Neither the Group nor the Charity have identified any contingent assets due either at 31 December 2020 nor at 31 December 2019.

18. CONTINGENT LIABILITIES

The Charity had at the year end committed to a Coronavirus Business Interruption Loan Scheme loan of £5,000,000.

19. CAPITAL COMMITMENTS

The Group had no capital commitments either at 31 December 2020 nor at 31 December 2019.

FOR THE YEAR ENDED 31 DECEMBER 2020

21. RETIREMENT BENEFITS (continued)

Local Government Pension Scheme (LGPS)

SSAFA participates in a defined benefit scheme with contributions paid by the employer. The scheme is a multi-employer scheme administered by the London Pension Fund Authority (LPFA) and is only open to certain categories of SSAFA’s employees. The scheme is closed to new members.

At 31 December 2020 the Association had 21 active members (2019: 33).

The last actuarial valuation of the scheme was at 31 March 2019 using the projected unit method and the attained age method, dependent on the fund being valued. At the valuation date the market value of the LPFA assets was £4,659m in comparison to the actuarial value of benefits that had accrued to members of £5,142m. Accordingly, as at 31 March 2013, there was a deficit of £483m. Although the London Pension Fund Authority is a multi-employer scheme, it has been able to allocate assets and liabilities relating to SSAFA Forces Help and these are disclosed below.

The employer contributed 19.7% during the year and the employee contribution rate ranges from 5.5% to 10.5% depending on the full-time annual rate of pay.

At 31 December 2020 the valuation was updated in accordance with FRS 102 and in line with the assumptions used in the 2020 scheme valuation. The major assumptions used by the actuary were:

Assumptions as at 31 December 2020
31 December 2019
%p.a. %p.a.
RPI increases 2.9% 3.1%
CPI increases 2.5% 2.3%
Salaryincreases
Pension increases
Discount rate		 3.5%
2.5%
1.3%		 3.9%
2.4%
2.1%

Mortality assumption

The post-retirement mortality tables are based on Club Vita analysis. These base tables are then projected using the CMI 2018 model allowing for a long-term rate of improvement of 1.25% per annum.

20. BANK GUARANTEE

The Charity has guaranteed overdraft facilities for its charitable trading subsidiary, SSAFA Family Health Services, up to £1 million. As additional security, the bank holds a debenture over the assets of SSAFA Family Health Services.

21. RETIREMENT BENEFITS

21. RETIREMENT BENEFITS 2020
2019
£’000 £’000
Local Government Pension Scheme 411
1,143
Aviva GroupPersonal Pension Plan
NHS Pensions Scheme
Total contributions		 436
16
862
433

26

1,602

Aviva Group Personal Pension Plan

SSAFA operates a defined contributions pension scheme for the benefit of SSAFA’s employees. The assets of the scheme are administered by Trustees in a fund independent from those of the Charity. The charge for the year represents those contributions payable to the scheme in respect of the accounting period.

SSAFA had 235 active members in the scheme as at 31 December 2020 (2019: 238) and total pension scheme contributions outstanding at the year end amounted to £51,000 (2019: £49,000).

NHS Pensions Scheme

Following the transfer of staff to SSAFA from the MOD, SSAFA currently participates in the NHS Pensions Scheme. The NHS Pension Scheme is an unfunded multi-employer defined benefit scheme. The assets of the scheme are administered by NHS Pensions in a fund which is independent of SSAFA. The charge for the year represents those contributions payable to the scheme in respect of the accounting period. Entry into this scheme is strictly limited to employees transferring to SSAFA from the NHS and at 31 December 2020, the Association had 2 (2019:3) active members in this scheme.

The pension scheme contributions outstanding at the end of the accounting period amounted to £1,000 (2019: £2,000).

Assumptions: members will exchange half of their commutable pension for cash at retirement and active members will retire at one retirement age for all tranches of benefit, which will be the pension-weighted average tranche retirement age. No members will take up the option under the new LGPS to pay 50% of contributions for 50% of benefits.

Assets

The estimated asset allocation as at 31 December 2020 is as follows:

31 December 2020 31 December 2019
%p.a. %p.a.
Equities 55% 54%
Target Return Portfolio 23% 25%
Infrastructure 7% 7%
Property 9% 9%
Cash 6% 5%
Total 100% 100%

None of the fair values of the assets shown above include any of the Group’s own financial instruments or any property occupied by, or other assets used by the Group.

2020 2019
Statement of fnancialposition as at 31 December 2020 £’000 £’000
Fair value of scheme assets(bid value) 117,484
115,192
Present value of funded obligations (134,570) (116,898)
Netpension liability (17,086) (1,706)

44 ANNUAL REPORT AND ACCOUNTS 2020

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~~NOTES TO THE FINANCIAL STATEMENTS~~

~~NOTES TO THE FINANCIAL STATEMENTS~~

FOR THE YEAR ENDED 31 DECEMBER 2020

FOR THE YEAR ENDED 31 DECEMBER 2020

21. RETIREMENT BENEFITS (continued)

Reconciliation of defned beneft obligation: 2020
£’000		 2019
£’000
Opening defned beneft obligation 116,898 107,352
Current service cost 487 845
Interest cost 2,353 2,958
Change in fnancial assumptions 20,151 13,027
Change in demographic assumptions - (4,200)
Experience gain on defned beneft obligation (1,467) -
Past service costs 618 735
Contributions by Scheme participants 88 184
Estimated benefts paid (net of transfers in) (4,558) (4,003)
Closing defned beneft obligation 134,570 116,898
Reconciliation of fair value of employer assets: 2020
£’000		 2019
£’000
Opening fair value of scheme assets 115,192 101,849
Interest on assets 2,322 2,816
Return on assets less interest 2,884 13,218
Administration expenses (150) (132)
Other actuarial gains 1,139 -
Contributions by employer (including unfunded) 567 1,260
Contributions by scheme participants 88 184
Estimated benefts paid (net of transfers in and including unfunded) (4,558) (4,003)
Closing fair value of employers assets 117,484 115,192

The actual return on plan assets over the year ended 31 December 2020 was £5,206,000 (2019: £16,034,000).

Defned beneft costs recognised in the Statement of Financial Activities 2020
£’000		 2019
£’000
Service cost 1,105 1,580
Net interest on the defned liability 31 142
Administration expenses 150 132
Defned beneft costs recognised in the Statement of Financial Activities 1,286 1,854
Re-measurement of the net assets/(defned liability) 2020
£’000		 2019
£’000
Return of fund assets in excess of interest 2,884 13,218
Other actuarial gains on assets 1,139 -
Change in fnancial assumptions (20,151) (13,027)
Change in demographic assumptions - 4,200
Experience gain on defned beneft obligation
Re-measurement of the net (defned liability)/asset		 1,467
(14,661)		 -
4,391

21. RETIREMENT BENEFITS (continued)

Sensitivity Analysis

The following table sets out the impact of a small change in the discount rate or mortality £’000s £’000s £’000s
assumptions:
Adjustment to discount rate 0.1% 0% -0.1%
Present value of total obligation 132,283 134,570 136,899
Projected service cost 586 599 612
Adjustment to long term salary increase
Present value of total obligation 134,675 134,570 134,466
Projected service cost 599 599 599
Adjustment to pension increases and deferred revaluation 0.1% 0% -0.1%
Present value of total obligation 136,764 134,570 132,412
Projected service cost 611 599 587
Adjustment to life expectancy assumptions +1 Year None - 1 Year
Present value of total obligation 139,269 134,570 130,030
Projected service cost 619 599 580

22. FINANCIAL ASSETS AND LIABILITIES

Group 2020 2019
£’000 £’000
Financial assets 42,004 37,330
Financial liabilities 3,294 3,828
Charity 2020 2019
£’000 £’000
Financial assets 41,150 36,454
Financial liabilities 3,026 3,178
Reconciliation of opening and closing defcit: 2020
£’000		 2019
£’000
Defcit at beginning of the year (1,706) (5,503)
Current service cost (487) (845)
Past service cost (618) (735)
Employer contributions 567 1,260
Other fnance Income (31) (142)
Actuarial (losses)/gains (14,661) 4,391
Administrative expenses (150) (132)
Defcit at end of the year (17,086) (1,706)

46 ANNUAL REPORT AND ACCOUNTS 2020

ssafa.org.uk 47

~~NOTES TO THE FINANCIAL STATEMENTS~~

FOR THE YEAR ENDED 31 DECEMBER 2020

23. RELATED PARTY TRANSACTIONS

The Charity had the following transactions with its wholly owned subsidiaries

The Charity had the following transactions with its wholly owned subsidiaries
2020 2019
£’000 £’000
Management fees charged to SSAFA Forces Help Enterprises Limited 15 15
Donation received from SSAFA Forces Help Enterprises Limited under Gift Aid 327 325
Salary and management charges to SSAFA Family Health Services 5,649 10,009
Donation received from SSAFA Family Health Services under Gift Aid 2,146 2,445
Amount due from SSAFA Family Health Services 478 783
Salary costs recharged to SSAFA CMS Limited 167 72
Amounts due from SSAFA CMS Limited 5 22
Amounts due from Military Wives Choirs Foundation 264 261

The following transactions took place between SSAFA Family Health Services, a wholly owned subsidiary and, SSAFA GSTT Care LLP, a joint venture investment in which SSAFA Family Health Services has a 50% interest.

investment in which SSAFA Family Health Services has a 50% interest.
2020 2019
£’000 £’000
Sales to SSAFA GSTT Care LLP
2,407		 5776
Amounts due from SSAFA GSTT Care LLP
-		 292

Guarantor:

The Charity is the Guarantor of a £1 million overdraft facility provided to SSAFA Family Health Services by Royal Bank of Scotland

24. POST BALANCE SHEET EVENTS

Since the year end the Charity has received a contribution from the MOD towards its defined benefit pension scheme of £10,000,000. The Scheme was valued as at 31 March 2021 after the receipt of these funds, and the deficit had fallen to £4,260,000.

Since the balance sheet date the Charity has drawn down on the Coronavirus Business Interruption Loan and has a loan of £5,000,000 to be repaid by January 2023.

SSAFA GSTT Care LLP ceased trading during 2020 and since the year has been placed into Members’ Voluntary Liquidation.

48 ANNUAL REPORT AND ACCOUNTS 2020

SSAFA, the Armed Forces charity, has been providing lifelong support to our Forces and their families since 1885. Last year our teams of volunteers and employees helped more than 79,000 people in need, including those still currently serving, veterans from the Second World War and from more recent conflicts, as well as their families.

SSAFA understands that behind every uniform is a person. And we are here for that person – any time they need us, in any way they need us, for as long as they need us.

NEED TO TALK?

SSAFA’s Forcesline is a free and confidential helpline providing advice and information for serving personnel, reserves, veterans and their families, and is completely independent of the chain of command.

Call 0800 731 4880 Lines open 09.00 to 17.30 weekdays

Visit ssafa.org.uk/forcesline

To make a donation and help us provide lifelong support to our Armed Forces and their families:

Call 020 7403 8783

Visit ssafa.org.uk/give

SSAFA Queen Elizabeth House, 4 St Dunstan’s Hill, London EC3R 8AD Phone: 020 7403 8783 Web: ssafa.org.uk | Twitter: @SSAFA | Facebook: SSAFA | Instagram: ssafa_armedforcescharity Registered as a charity in England and Wales Number 210760 in Scotland Number SC038056 and in Republic of Ireland Number 20202001. Established 1885.