AGENDA ITEM 8. SUBSCRIPTION RATES
When looking to 2025 the underlying budget deficit identified in 2024, and evident in previous year’s accounts, cannot be ignored if the Club is to be financially sustainable. As the Chairman said in his ‘Chat’ for TR Action 355 in reference to Henry Ford, we can’t continue to do as we have done in the past and expect better outcomes in the future.
The classic car club marketplace is crowded, and we need to ‘up our game’ to stay relevant and competitive. Consequently, the Strategy developed in recent years, and briefed to the membership at previous AMMs, has now moved into the implementation phase and this will continue through 2025. Change though, however positive and regardless of the future benefits and savings it will realise, is never without its initial costs.
The investments we will make in 2025 should increase the value members receive from their subscription. Only by offering good value for money will we attract the new members needed to sustain the Club going forward. To balance the Club finances and provide the financial headroom to improve the Club offer in the future, a significant increase in subscriptions is required from 1 April 2025. My expectation is that a rise in subscription rates of this scale is a ‘one off’ event.
I have no wish to ask members to accept an arbitrary or unnecessary increase in subscriptions. Consequently, in taking up my role I undertook a detailed review of Club subscriptions and income. It is my experience that, for Clubs like ours, over time the relationship between current subscriptions , inflation , and financial requirements can become disassociated. Only through a comprehensive review can a baseline position be established that gives confidence that subscription rates are both necessary and fair.
To understand how I have come to a figure for the subscription rates for 2025, I first need to explain the impact of VAT and transaction fees on subscriptions and, as a result, the adjustments to our membership rates I believe to be fair.
On UK and EU memberships the Club pays 10% VAT and an average of 1.75% in online payment transaction fees (regardless as whether paid by credit card or direct debit). For a £52 UK/EU subscription, the Club only receives on average £46. For Rest of the World (RoW) members there is no VAT, but charges on transactions are higher at around 2.5% and so the Club receives on average £56.50. Given geographic restrictions generally prevent RoW members benefiting from the majority of what the Club offers, even after taking account of the extra postage costs for TR Action, there now seems little justification for inflating their membership rate above the standard.
Members opting to pay by direct debit no longer save the Club money on transaction fees, so I don’t believe retaining this discount remains in the Club’s interest. New or rejoining members currently pay £5 as a joining fee, but as we no longer send out a physical membership welcome pack and membership card, I see no justification for continuing this charge. I support the current position that Youth Membership remains at 50% of the full rate and that the family member rate remains at £10.
The first element of the required subscription rise is to address the underlying deficit in the accounts of around £35,000. To make good the deficit, subscriptions need to increase by £8 a year. If, however, we only increase subscriptions to this level you would see no added value or improvement in your membership experience for the extra cost. Only for each £1 above that can the Club add value to its offer.
The MT intends to use the additional money raised through this subscription rise in the Events and Membership areas of the budget. To provide future Club events on the scale of the Inter Club we cannot rely on the goodwill and fortitude of volunteers like Lesley as we did in 2024. If we wish to have these types of events, we need to increase event staff capacity and capability in the Office. Consequently, we are in the process of recruiting a full time, professional events manager. This inevitably, and significantly, increases our staff costs. Club events scheduled for 2025 are being refreshed to hopefully engage more members across the Country, and the 6 Regional Events are all being financially supported by the Club. We are going to better leverage our events programme and invest in marketing the Club to wider and different audiences. There is no surplus from events anticipated in 2025 to offset some of the costs this year. In addition, the maintenance of the Breakdown App is going to be contracted out to improve its reliability. The costs will be shared, pro rata by membership numbers, between our Club and the other European Clubs. The admin staff has been bolstered by employing Emi Lyford to provide additional staff capacity to support members as we complete the transition to the new membership portal. With new staff come additional training and professional development costs. The Government hike in employer National Insurance contributions further increases the cost of our own staff, as well as those of our suppliers; increased costs they are passing on to us as a customer though higher prices.
With these additional costs and investments, the total budget for 2025 is £410,000. With income from Insurance Commission and Advertising expected to be largely unchanged, and with no surplus from events expected, this leaves £293,000 to be raised from member subscriptions. Subscription rates will change from 1 April 2025. In the first quarter, subscriptions at the current rate should provide an income of £52,000, leaving £241,000 to be raised in the final 3 quarters of the year. A subscription rate of £72 per year from 1 April 2025 is required to achieve that. (It sounds a lot, but it is just £1.66/month more for UK/EU members; £1.17/month for RoW).
I appreciate an increase in subscriptions of this scale in one year is hard to take, but it is the reality we must accept if the Club is to better meet the expectations of its membership, modernise, provide better value for money, and be competitive in the market to attract and retain new members.
My proposals, therefore, regarding subscriptions from 1 April 2025 inclusive are:
1. The full subscription rate for membership of the Club increase to £72 p.a.
2. Youth membership remains at 50% of full membership i.e. £36 p.a.
3. £72 p.a. will be a global rate for all full memberships.
4. Family membership will continue unchanged at £10.
5. The direct debit discount will be discontinued.
6. The £5 joining fee for new members will be discontinued.
7. The grace period to renew an existing membership that lapses will be fixed at 30 days .
I hope, given the detailed explanation above, you can support these proposals.
I look forward to answering any questions on this report at the AMM. For those not able to attend, I will post a follow up report on the Club website summarising the Q&A. If there are any further questions after that, please contact me at finance@tr-register.co.uk .
