The number of estates leaving legacies has risen by 22% year on year, contributing to a 9% overall growth in the legacy market which is now valued at £4.5bn according to the first Legacy Giving Report.
Published through a partnership between Smee & Ford and Legacy Futures, the inaugural report provide ‘the most comprehensive legacy data and market review ever available’ says its authors.
The number of charitable estates hit 46,000, an increase of 22% on last year and the 9% growth in legacy giving in 2024 was a sizeable increase on the 1.3% growth seen in 2023. Over the past 10 years, legacy gifting has seen an annual growth rate of 4.8%. Legacy gifts now make up an average of 30% of fundraised income across the top 1,000 legacy supported charities, with some sectors such as animal, conservation, and disability charities seeing figures as high as 50%.
One of the key drivers behind the record increase in 2024 was the clearing of longstanding probate application backlogs at HM Courts & Tribunals Service resulting in a 15% increase in charitable bequests; bequest numbers were the largest recorded at c. 145,000.
Rob Cope, Executive Director Membership & Operations at CIOF, said:
“Legacies play a pivotal role in supporting charities, of every shape and size, across the UK to continue their vital work. As such, resources like this report are invaluable. In sharing such a comprehensive overview of the nation’s legacy giving, with key trends and projections for the future, The Legacy Giving Report will no doubt become a go to benchmarking and guidance resource for fundraisers looking to develop their legacy fundraising and bolster broader fundraising strategies.”
“It is also an excellent example of agencies working together to provide, for free, the kind of unique data and insight that can help charities grow and thrive, something the Chartered Institute of Fundraising is pleased to encourage and support.”
The report also found the the average estate size for those leaving a charitable gift was £599,000, compared to £394,000 for non-charitable estates and average gift values reached £65,000 for residual gifts and £4,500 for pecuniary gifts.
Regionally the South Coast and London are the most charitable areas of the country, with nearly 45% of probated estates in the regions containing a legacy gift. Nationally, 16.6% of estates included a legacy.
And at the start of what is now known as The Great Wealth Transfer; the largest inter-generational transition of wealth in living history from the baby boomers (born 1946–1964) to their offspring; the cohort now make up 21% of all legators and will dominate legacy giving by 2035.
Health charities make up a sizeable percentage of all legacies, at 39% of legacy incomes. Animal charities sit at 16%, and conservation at 8%.
While the report acknowledges changes to Inheritance Tax rules, frozen at £325,000 until 2030 with defined contribution pensions will no longer exempt from 2027, will change behaviours, it says it is ‘unclear’ as to what the impact will be.
“On the one hand, and with a positive impact for charities, more people may consider reducing their IHT bill by taking advantage of charity tax relief, which reduces the IHT rate from 40% to 36% when more than 10% of an estate is left to charity. However, on other hand, another response may be to move more money to potential beneficiaries before death to reduce the tax bill.”
In the short term legacy income is expected to grow further, reaching £5.1bn by 2030. Deaths are expected to grow at around 1.1% p.a. over this time period. The report adds the longer-term outlook is very positive, with legacy income growth forecast to accelerate, driven primarily by a large increase in deaths over this period as the Baby Boomer cohort comes to the end of their lives. As such, legacy income is forecast to reach £10.6 billion by 2050 (£6.2 billion in real terms accounting or inflation) providing a ‘substantial boost’ to charities.
Ashley Rowthorn, Executive Director of Legacy Futures and Smee & Ford, said:
“This report represents an important step in improving our shared understanding of the legacy giving landscape. By bringing together data, analysis and real-world examples, we hope it will help charities of all sizes to better navigate current challenges and plan for the future.
“Legacy income is a long-term, resilient source of support for the sector, and having access to clear, evidence-based insights is vital for organisations looking to grow or sustain this important form of giving.”
The Legacy Giving Report can be reviewed here.
One Response
Very interesting article – thank you.
I would also like to believe that those of us estate planners and solicitors who regularly ask their clients about giving to charity when taking instructions are having a positive impact for the charity sector.