Save the Children UK's income fell by £43 million last year as foreign aid cuts and a challenging fundraising environment squeezed the charity's finances.

The cuts come at a time when children's needs around the world have reached record levels, according to its latest annual report.

The charity said the sharp drop in income came during a year marked by conflicts in Gaza, Ukraine and Sudan, as well as growing financial pressures on families in the UK.

Save the Children said cuts to US aid reduced funding flowing through multilateral institutions, contributing to the decline in income compared with 2024.

The report also details a major organisational restructure undertaken in 2025 as the charity sought to strengthen its financial position after costs rose faster than income. The first phase of the restructuring is expected to deliver just under £9m in gross annual savings.

Moazzam Malik, chief executive of Save the Children UK, said children were bearing the consequences of crises they had no role in creating.

"Children did not create the conflicts, inequalities or climate pressures shaping their lives, but they are living with the consequences. Our responsibility is to ensure their voices are heard and their rights protected," he said.

Malik said the charity remained focused on delivering results despite the difficult operating environment.

"The achievements in this report reflect the dedication of our staff, volunteers, partners and supporters. Together, we will continue to focus on impact, accountability and long-term progress so that every child has the opportunity not just to survive, but to thrive."

He acknowledged the financial challenges facing the organisation and the need for restructuring.

"We must also recognise the incredibly challenging financial climate and the changes we have had to make to our organisation to continue to deliver the best possible impact for children," Malik said.

"I want to thank our staff and volunteers for their commitment, resilience and compassion during what has been an incredibly difficult period for many across Save the Children. This comes against sky rocketing needs for children across the globe, including in places like Gaza, Sudan and Ukraine."

The annual report also highlighted progress on pay equality. Save the Children said its median ethnicity pay gap remained at 0.8%, while the pay gap between Black female employees and White male employees narrowed from 11% to 5%.

However, the charity said further progress was needed to improve representation at senior levels, with Black, Asian and Minority Ethnic employees accounting for 19% of staff in the highest pay quartile.

---