What you need to know about Digital ID, Cyber Security, and Key Risks for Charities

UK organisations face a pivotal period of change across compliance, cyber security, and sector risk. A proposed Digital ID scheme could reshape Right to Work checks for employers, while escalating cyber threats are pressuring organisations of every size. At the same time, charities are managing rising operating deficits, increasing demand, and governance challenges. This post distils November’s key updates and the practical steps leaders can take.

Digital ID and Right to Work: what’s changing
The government intends to introduce a Digital ID available to UK citizens and legal residents, with credentials stored securely on mobile devices and alternatives for those without smartphones. The system will use modern encryption and authentication, aiming to simplify employer compliance for Right to Work checks. A formal consultation later this year will guide how the service operates, so employers should actively participate and track guidance to prepare their onboarding and verification processes.

Practical actions for employers:

• Map your current Right to Work process and identify steps that will change under Digital ID.
• Nominate a compliance lead to follow the consultation and future guidance.
• Plan for accessibility, including procedures for individuals without smartphones.
• Update privacy notices and data handling protocols to reflect new verification flows.

Cyber security: why urgency is warranted
The National Cyber Security Centre (NCSC) handled more than 200 significant cyber incidents over the past year—around twice the number recorded the year before. High-profile cases have affected well-known brands, but small and mid-sized organisations are equally at risk and can face long-lasting financial and reputational damage.

NCSC resources to use now:

• Cyber Action Toolkit: first steps for sole traders and small firms.
• Cyber Essentials certification: demonstrates protection against common threats; full certification for small organisations (under £20m turnover) includes cyber liability insurance.
• Early Warning service: alerts about potential cyber-attacks.
• Takedown Service: removes phishing campaigns, with many taken down rapidly once reported.

Immediate steps to strengthen resilience:

• Complete the Cyber Action Toolkit and schedule remediation.
• Pursue Cyber Essentials certification and close any gaps identified.
• Enrol in Early Warning and define an incident response process with clear roles.
• Establish a phishing reporting workflow and use the Takedown Service.
• Train staff routinely on password hygiene, MFA, and phishing awareness.

Key risks for charities: what trustees should prioritise
Recent assessment highlights multiple pressures on the charity sector:

• Rising operating deficits: 22.5% reported a deficit in 2023 (up from 20% in 2022).
• Increasing demand vs. rising costs: more need, higher delivery costs, and cost-of-living effects.
• Use of reserves: plugging annual gaps erodes financial safety nets.
• Risks to public trust: misuses (e.g., unauthorised payments, Gift Aid issues, private-benefit concerns) harm reputation despite being relatively rare.
• Other concerns: governance, safeguarding, fraud, cyber threats, and wider external pressures.

Trustee checklist:

• Forecasting and planning: adopt rolling forecasts and monitor warning indicators.
• Reserves policy: review adequacy, triggers for use, and rebuild plans.
• Governance and controls: refresh trustee training and strengthen financial authorisations.
• Fraud and cyber: test controls, pursue Cyber Essentials, and embed incident response.
• Safeguarding and reputation: update policies, practice responses, and ensure transparent reporting.
• Stakeholder confidence: communicate proactively about risk management and certification progress.

Where to go next
These developments will influence organisations in the months ahead. Leaders should keep a close watch on the Digital ID consultation, uplift cyber maturity using NCSC guidance, and ensure trustees address the sector’s financial and governance pressures. For a concise overview and practical pointers, read the full update here: Digital ID, Cyber Security and Charity Risks.

In summary:

• Digital ID could become the standard for Right to Work checks—prepare processes and follow the consultation.
• Cyber incidents are rising; use NCSC’s toolkit, Early Warning, Takedown Service, and pursue Cyber Essentials.
• Charities face financial strain and governance risks; prioritise forecasting, reserves, and robust controls.