# Unspent grant money: what should you do with it?

Work out your grant underspend, check the award terms and agree what happens next. A practical guide for UK charities with an example and email template.

- Author: OpenGrant
- Topic: [Grant management](https://opengrant.co.uk/blog/category/grant-management)
- Published: 2026-10-22
- Updated: 2026-10-22
- Canonical URL: https://opengrant.co.uk/blog/unspent-grant-money-what-to-do

If you have grant money left over, check the award terms and reconcile the project spending before using it for anything else. Tell the funder what remains, why it remains and whether any agreed costs are still unpaid. Ask it to confirm the treatment of the balance: do not assume you can keep it, carry it forward or spend it on another activity. This guide offers a practical process for UK charities and community groups; the requirements of your own award take priority.

## 1. Find the rule for your particular grant

Read the award letter, grant agreement, approved budget and any later written changes together. Look for wording about unspent funds, repayment, the spending period and the final claim. Save the relevant clauses alongside your figures so that the person contacting the funder can explain both the numbers and the question.

For example, section 4.1 of the [Heritage Fund's example terms for National Lottery Heritage Grants of £10,000 to £250,000](https://www.heritagefund.org.uk/funding/national-lottery-heritage-grants-10k-250k/terms-conditions-0) requires the immediate return of unspent grant when a project finishes without using the whole award. The page explicitly says an individual award's terms may differ. This is a named programme example, not a universal rule for every UK grant.

Do not treat a small balance as automatically exempt. If your agreement is unclear, ask the funder to identify the applicable rule and process. Keep the money identifiable in your records while the question is resolved.

## 2. Separate cash remaining from a forecast underspend

A bank balance alone does not show what the project has left to spend. Prepare a reconciliation for this award, using the approved budget and your transaction records. As a working method, separate:

- **Grant awarded:** the agreed maximum, including any approved revision.
- **Grant received:** payments that have actually arrived.
- **Costs paid:** spending allocated to this grant, supported by records.
- **Costs still payable:** unpaid invoices and other commitments for agreed work.
- **Remaining planned costs:** work still needed to finish, listed separately from existing commitments.

Check each cost against the award's eligibility and timing rules before including it in a claim. Review refunds, credit notes and cancelled orders too. Keep uncertain items in a separate list for clarification rather than quietly counting them as eligible expenditure.

If several funders support the project, show which costs and contributions belong to each award. Do not use a whole-project surplus as the repayment figure for one grant without checking its funding terms. Our [match funding guide](https://opengrant.co.uk/blog/what-is-match-funding-for-grants) explains how to distinguish contributions and funding assumptions.

## A worked example: £1,500 in the bank is not £1,500 spare

Suppose a fictional community group receives its entire £8,000 project grant in advance. It has paid £6,500 for the agreed work, leaving £1,500 of that grant in its account. A £600 venue invoice for completed sessions is still unpaid. Assume the invoice is eligible under this fictional award and no other project costs remain.

The expected final cost is £6,500 + £600 = £7,100. The forecast underspend is therefore £8,000 − £7,100 = £900. The group reports the £600 liability separately so that the funder can see why the cash balance and forecast underspend differ.

It explains that a supplier discount produced the saving and confirms whether all planned sessions took place. It asks how to deal with the £900 under its agreement. This calculation is a preparation tool, not permission to keep the balance or a repayment instruction for another programme.

If the £600 invoice is disputed or a final cost is unknown, label the figure provisional. Give the funder the uncertainty and the expected resolution date instead of presenting a precise total you cannot yet support.

## 3. Send the funder a clear account of the underspend

Contact your usual grant officer or use the programme's stated reporting route. Explain whether the balance comes from a saving, delayed work or activity that will not happen. Those situations call for different decisions, so include what was delivered as well as what was spent.

You can adapt this message:

“For grant \[reference], we have received £\[amount] and paid £\[amount] as at \[date]. Agreed costs of £\[amount] remain payable, and we forecast a final underspend of £\[amount]. This arose because \[reason]. We have delivered \[brief account of agreed activity], with \[remaining work, if any]. The attached reconciliation shows the figures. Please confirm how the balance should be treated under our award, including any repayment or final-claim adjustment and the required timing.”

If you want to propose further activity, describe it as a request awaiting a decision. For the [Heritage Fund programme above, budget changes require prior approval and change requests must be in writing](https://www.heritagefund.org.uk/funding/national-lottery-heritage-grants-10k-250k/receiving-a-grant-0). Its guidance does not guarantee agreement. For a fuller change request, see our [guide to changing a grant-funded project](https://opengrant.co.uk/blog/change-grant-funded-project-after-award).

## 4. Confirm repayment or a reduced final payment

Check both the award total and the money already received before arranging a transfer. The [Heritage Fund's receiving-a-grant guidance](https://www.heritagefund.org.uk/funding/national-lottery-heritage-grants-10k-250k/receiving-a-grant-0) says a final payment may be reduced or unspent money may need to be returned, with the final amount agreed before payment. It also tells recipients to settle final accounts with suppliers and contractors before requesting their final payment.

Ask your funder to confirm the amount, payment reference and deadline that apply to your award. Verify repayment instructions through a known funder contact before transferring money. Keep the confirmation, payment record and acknowledgement together; if a final instalment is reduced instead, record that adjustment clearly.

Do not buy extra items simply to make the budget reach zero. First establish whether the proposed purchase is needed, eligible and approved under the grant. A documented saving gives the funder a clear decision to make.

## 5. Close the record without losing the evidence

Before marking the grant finished in your tracker, check that the final spending report, funder decision and any repayment agree. Record who checked the reconciliation and where the supporting documents are stored. Follow your award's record-retention requirements.

- Have all outstanding costs been resolved or clearly disclosed?
- Does the final report explain any activity that changed or did not happen?
- Is there written confirmation of how the balance was handled?
- Have any required repayment and final reporting steps been completed?

Use our [grant monitoring report guide](https://opengrant.co.uk/blog/how-to-write-grant-monitoring-report) to present the final figures alongside delivery evidence. If you need funding for a separate next phase, use [OpenGrant's charity and community grant search](https://opengrant.co.uk/grants?applicant=vcse&ftype=grant) to investigate suitable awards, and check each funder's current guidance.

## Find grants

- [Search charity and community grants](https://opengrant.co.uk/grants?applicant=vcse&ftype=grant)

## Related guides

- [What is match funding for grants? A practical UK guide](https://opengrant.co.uk/blog/what-is-match-funding-for-grants): Understand grant match funding, calculate your contribution and check cash, in-kind support and evidence requirements before applying.
- [Can you change a grant-funded project after an award?](https://opengrant.co.uk/blog/change-grant-funded-project-after-award): Learn how to request changes to a UK grant-funded project, with a budget example, an email template and a checklist for recording approval.
- [How to write a grant monitoring report: a practical UK guide](https://opengrant.co.uk/blog/how-to-write-grant-monitoring-report): Write a clear grant monitoring report with a practical structure, a worked example and checks for spending, outcomes and missing evidence.

## Sources and further reading

- [National Lottery Heritage Fund: example grant terms, including unspent funds](https://www.heritagefund.org.uk/funding/national-lottery-heritage-grants-10k-250k/terms-conditions-0)
- [National Lottery Heritage Fund: receiving a grant, changes and final payments](https://www.heritagefund.org.uk/funding/national-lottery-heritage-grants-10k-250k/receiving-a-grant-0)

All guides: https://opengrant.co.uk/blog.md · Glossary: https://opengrant.co.uk/glossary.md · Agent index: https://opengrant.co.uk/llms-guides.txt