Charities say they have sold ‘vital assets’ in an effort to fill the financial gap left by delays in processing probate with an average of 14% of annual income is currently being held up by probate issues; the same percentage as in a similar study last year.
In a poll of 100 UK charity board directors, finance directors, investment managers and investment directors, wealth manager Rathbones identified 87% of charities said they were being ‘negatively impacted’ by delays, with more than one in ten reporting being ‘very badly affected.’ The situation remains largely unchanged since a previous survey in May 2024. The claim comes despite much improved turnaround times at the Probate Registry.
Legacy income is a well established source of revenue for charities, contributing as much as £4.5 bn annually to support their work. Over half (57%) of charity executives asked say delays have meant they have sold vital assets, such as property, to fill the financial gap. Around half (51%) say it has adversely affected recruitment and worryingly, 43% say they have had to cut back on vital services. Others report having to make redundancies (38%) and cutting back on research (24%).
Access to funding is ‘plagued’ by delays in processing probate exacerbated by the pandemic said Rathbones, adding the system remains ‘fragile’ with many estates still facing long delays, leaving charities unable to access vital legacy income when they need it most.
A third (36%) of charities said as much as between 15% and 30% of their income was currently held up because of these delays. Almost nine in 10 (88%) surveyed said they see the importance of people leaving significant amounts of money in wills for charities increasing over the next five years, with 12% saying it will increase significantly. Just 12% say it will stay the same.
Andy Pitt, Head of Charities at Rathbones, said:
“While there have been improvements in probate waiting times over the last six months, this is still a live issue for charities, and costing them millions of pounds of vital income. It’s forcing charity executives to make impossible financial decisions on how to survive.
“Charities are having to become increasingly agile and resilient to build against these kinds of disruptions in an already challenging environment. It is critical charities ensure their investment portfolios are structured to provide liquidity when needed, balancing long-term growth with short-term flexibility, while also ensuring they have the clarity and foresight to anticipate and plan for times of financial stress.”
