What about our employees and all our files?

England and Wales: This page sets out the position in full, with one open question on personal data that nobody has yet answered. Scotland: covered — the employment and pension rules are the same, and Scotland’s charity law names who keeps the records after closure; the Scottish local government pension scheme is not covered here. Northern Ireland: partly covered — the transfer rule is set out, but Northern Ireland’s own pensions law, its local government scheme (NILGOSC) and record keeping after closure are not covered.

The first question: is anyone taking over the work?

When closing a charity with staff, one question decides what happens to them. The question is whether another organisation is going to carry on what you do.

This page follows transfer or distribute the remaining assets in the hub’s order. But staff and pension questions can bite much earlier, so read it as soon as closure is likely.

• Yes. The Transfer of Undertakings (Protection of Employment) Regulations 2006 may apply. These are known as TUPE, and they cover the whole UK for this kind of transfer. If they apply, the employees move to the new organisation with their jobs.
• No. The charity is stopping, and nobody is carrying on the work. That is a closure, not a transfer. Ordinary redundancy law applies.

TUPE covers a transfer “where there is a transfer of an economic entity which retains its identity” (reg. 3(1)(a)). An economic entity is, verbatim, “an organised grouping of resources which has the objective of pursuing an economic activity” (reg. 3(2)).

“We’re a charity” is not an answer. The regulations say in terms that they apply to undertakings, verbatim, “whether or not they are operating for gain” (reg. 3(4)(a)). And a relevant transfer “may take place whether or not any property is transferred” (reg. 3(6)(b)).

A charity has no shares to sell. So this is the only way its work and staff can move.

The employment process itself belongs to the people hub. For the post-holder whose funding is ending, see the grant is ending: what do I owe the post-holder?.

Statutory redundancy pay applies to qualifying employees. The rules and figures are on gov.uk. For status questions, see employee, worker or self-employed. For final payroll, see registering as an employer and running payroll.

The rest of the employment picture is in the people hub. Starting paperwork is in make the offer, check the right to work, give the statement. Absence and disciplinary problems are in handle sickness, absence and a first difficult conversation.

Pensions: which kind of scheme are you in?

If your scheme is money purchase, this section ends here: a money purchase scheme has no exit debt at all.

If the charity’s staff are only in NEST, or a similar auto-enrolment scheme (see set up the workplace pension), the scheme is almost certainly a money purchase scheme. Section 75 of the Pensions Act 1995 applies in England and Wales and Scotland. It does not apply to a money purchase scheme at all (s.75(1)(a)). There is no exit debt, no trigger event and nothing to negotiate, however many staff leave and whenever the charity closes.

For most charities founded this century, that is the whole answer. The test is the type of scheme, not its name. A money purchase scheme is outside s.75. A defined benefit or hybrid scheme is not. Check the scheme’s own documents.

If you are in a defined benefit multi-employer scheme: three things, in order

A minority of charities, mostly older ones, are in a defined benefit scheme shared with other employers. For them, three things matter, in this order. (A merger raises the same questions; carry out merger due diligence covers them.)

1. The debt is on a buy-out basis. The exit debt is worked out as the cost of buying annuities for every member from an insurer. The Charity Commission describes it as, verbatim, “calculated on the basis of paying all the actual expenses of winding up the pension scheme and securing all members’ benefits with annuities purchased from an insurance company”.

That is far above the pension deficit in your accounts. The two numbers measure different things.

In a multi-employer scheme, the debt also includes a share of “orphan” liabilities left by employers who have already gone. The mechanics are in the Occupational Pension Schemes (Employer Debt) Regulations 2005, not in s.75 alone. Those Regulations apply in England and Wales and Scotland.

2. The trigger is invisible. The debt does not need a merger, a sale or a closure. It is triggered when the charity stops employing anyone who is an active member of the scheme, while another employer still does (reg. 6ZA of the 2005 Regulations).

The Pensions Regulator puts it plainly: a debt “is triggered when the employer ceases to employ anyone who is an active member of the scheme”. That can be an ordinary retirement.

3. The ways out need agreement in advance. The Regulations set out several statutory easements. They include a period of grace, deferred debt arrangements, apportionment arrangements and others. Almost all need the scheme trustees’ agreement, and most need it before the trigger.

The period of grace has a hard notice window: up to 3 months after the cessation date. And none of them survives the scheme itself going into wind-up.

So the order in which a charity closes things down changes what it can do. Winding up the charity does not itself trigger the debt.

But trustees can lose every option they had if they wait. That happens if they let the last active member leave, or let the scheme go into wind-up, before they act. Take actuarial and legal advice before the last member leaves, not after the debt notice arrives.

Section 75 has changes waiting. For England and Wales and Scotland, the Pension Schemes Act 2026 will add provisions for new “superfund” schemes (ss.95 and 98). Those provisions are not yet in force. They matter only if a scheme moves into a superfund. They do not change the buy-out basis.

If you are an LGPS admitted body

Many charities are in the Local Government Pension Scheme because their staff moved from a council. In England and Wales, reg. 64 of the LGPS Regulations 2013 requires a cessation valuation and an exit payment when the charity stops having active members.

Be clear about what is law and what is policy. Reg. 64 says the fund’s actuary values the liabilities on assumptions the fund considers appropriate. It does not require a gilts basis. Most funds use a prudent basis in their Funding Strategy Statement. But that is each fund’s policy.

Since September 2020 there have been two ways to soften an exit: a deferred debt agreement, or spreading the payment under reg. 64B. Neither is automatic. Each depends on the fund having a policy. Check yours.

Records: the period, and who keeps them

The period is in statute for any charity that is not a company. Charities Act 2011 s.131(1) (England and Wales) says the trustees “must preserve” the accounting records. The duty lasts for at least 6 years from the end of the financial year they were made in. Section 131(3) keeps that duty on the last trustees after the charity has gone.

A charitable company is outside s.131 (s.135). Its own statutory period is shorter (Companies Act 2006 s.388). The Commission’s guidance still asks for 6 years.

Former trustees stay responsible. The Commission says you “remain responsible for the decisions you made while you were in office”. Those records are your evidence. If you merged, you can ask the receiving charity to hold them for you.

In practice, box the records, name a keeper and an address, and write a destruction date on the box. The general retention rules for a working charity are in set up your record retention schedule.

Personal data: an open question, recorded honestly

The Commission’s guidance also says to comply with data protection law if your records contain personal information. UK GDPR Article 5(1)(e) sets the rule. Personal data must be kept “for no longer than is necessary for the purposes for which the personal data are processed”. So a closing charity should delete or anonymise what it no longer needs, and keep only what has a continuing lawful reason.

Then there is a question nobody has answered. A charity that has been dissolved has no legal personality. Something must be the data controller for the personal data in those boxes for the years they are kept.

No ICO or Charity Commission guidance says who: the former trustees personally, a receiving charity, or a liquidator. The research looked and found no answer.

For accounting records of an unincorporated charity, s.131(3) says who keeps them. But keeping records is not the same as being the controller for the personal data in them. That question stays open.

What to do: minimise first, starting from map what personal data you hold and why. Then record your decision and your reasons — who holds what, why, and until when. How long to keep personal data in general is covered in setting your data retention schedule. This page does not restate its retention schedule.

Premises and the lease

The deliverable for this step includes surrendering the premises. The research behind this page does not cover how a lease is surrendered or ended. The lease itself decides that. The difference between a lease and a licence is covered in the running hub’s take on premises — lease, licence or share.

Scotland and Northern Ireland

Scotland: the same employment and pension rules, and a clearer answer on records. TUPE applies. The records period in the Charities and Trustee Investment (Scotland) Act 2005 s.44(2) is the same. Records “must be preserved by the charity” for that period, from the end of the financial year they relate to.

Scotland also says who keeps them once the charity has gone. Section 44(2A) of the Scottish Act was inserted from 1 April 2024. It covers a charity that ceases to exist. The records must then be kept for the rest of the period by, verbatim:

a person notified to OSCR who, immediately before it ceased to exist, was— (i) a charity trustee of the charity, or (ii) where the body was not a charity at that time, concerned in the management or control of the body.

That is a charity-law duty about who holds the records. It does not decide who is the data controller under UK GDPR. The data controller question is UK-wide and still unanswered.

The Local Government Pension Scheme in Scotland has its own regulations, which are not covered here. Do not apply the England and Wales reg. 64 to a Scottish fund.

Northern Ireland: partly covered. TUPE 2006 extends to Northern Ireland for the transfer rule this page relies on (reg. 1(3)). The narrower “service provision change” rule runs under separate Northern Ireland regulations.

Northern Ireland has its own pensions law, and this page has not checked whether its exit-debt rules match Great Britain’s. So confirm the position with the scheme.

Three things are not covered here:

• the Northern Ireland local government scheme, NILGOSC, which is not the LGPS
• Northern Ireland’s own redundancy figures
• who keeps a Northern Ireland charity’s records after closure

Do not read the England and Wales position across on those three.

With staff, pensions, records and premises dealt with, the last step is to remove the charity from the register, file final returns.

Common mistake: assuming TUPE does not apply “because we are a charity”

TUPE is thought of as a business-sale rule. But reg. 3(4)(a) applies to undertakings “whether or not they are operating for gain”. And a relevant transfer “may take place whether or not any property is transferred”. If someone takes over the work, employees may transfer. If nobody does, it is a closure and ordinary redundancy law applies.

Common mistake: keeping the records for a shorter period some articles quote

At least one reputable article gives a shorter figure for a closed charitable company. It probably comes from the UK-wide Companies Act 2006 s.388 rule for ordinary companies.

The Commission’s period is the same in its closure guidance and its merger guidance. It is the period this guide gives, counted from the end of the financial year the records were made. No source found answers who controls the personal data in them after dissolution.

Common mistake: saying “no pension problem” before checking which kind of scheme

The word “pension” triggers either panic or dismissal. NEST and most auto-enrolment schemes are money purchase. If yours is, s.75 does not apply and there is nothing to negotiate.

In a defined benefit multi-employer scheme, the debt is on a buy-out basis. It is triggered when the last active member leaves. For an unincorporated charity, the Commission says that shortfall falls on the trustees personally if the assets do not cover it.

Common mistake: closing things down in an order that kills the pension easements

The order feels administrative. It is not. Winding up the charity does not itself trigger the debt. But once the scheme is winding up, none of the easements remains available.

Most need trustee agreement in advance. The period of grace has a hard notice window. For an LGPS admitted body, the softer options exist only where the fund has adopted a policy.

Worked example

Tollgate Youth CIO, with one employee, is closing. Nobody is taking over its work.

No transferee is carrying on the work. So this is not a TUPE transfer. It is a closure, and ordinary redundancy law applies to the one employee. The manager follows the people hub’s process and checks statutory redundancy pay on gov.uk.

The employee’s pension is with an auto-enrolment master trust. The treasurer checks the scheme documents. It is a money purchase scheme. So s.75 does not apply, and there is no exit debt to plan around.

The trustees box the accounts and records. They name the chair as keeper, record an address, and write the destruction date on the box.

Before boxing, they delete personal data that no longer has a lawful reason to be kept. They minute who holds the rest, why, and until when. They do this because nobody has said who the data controller is once Tollgate no longer exists.

The outcome: the employee dealt with lawfully, the premises handed back, and the records boxed with a named keeper and a destruction date.