Charities’ legacy income to exceed £4.4bn per year

Charities’ legacy income to exceed £4.4bn per year

The latest data from Legacy Foresight’s Market Outlook 2022-2026 has suggested that charities’ legacy income from gifts left within wills is set to exceed £4.4 billion per year.

This represents a 26% increase on the average legacy income charities received over the last five years. Their income dropped by 11% in 2020 with the arrival of the pandemic and the ensuing delays across the economy. Income remained below predictions in 2021, again owing to administrative delays.

Jon Franklin, Chief Economist at Legacy Foresight, said:

“The underlying drivers of legacies remain robust and even in our most pessimistic scenario we expect to see considerable growth both in the number and value of legacy donations for charities.”

The projected increase has been calculated by the analysts of the legacy and in-memory sectors using legacy trends and predicted deaths. They have predicted an average of 134,000 – 137,000 bequests per year until 2026. The average value of these bequests is forecast to rise by 13% over this period as the value of property, and thus the size of people’s estates, continues to soar.

Meanwhile, the Office of National Statistics (ONS) has predicted that the currently elevated levels of deaths – 666,000 in 2021, 10% higher than pre-pandemic levels – will remain this year.

Franklin continued:

“Usually we see a close relationship between the number of deaths and bequests, but that hasn’t translated here – and that’s largely due to delays in the estate administration processes. This is not just at probate, but the backlog in registering deaths, preparing estates and IHT processing too.

While the timings and extent of this shortfall is uncertain, there may well be another 30-40,000 bequests in the system. So, we’re expecting to see some element of catch-up as more of these work their way through the system and that could be a welcome boost for charities.”

One consideration amid this growth is the uncertainty stemming from the Ukraine crisis and the subsequent rise in charity. Rob Cope, director of Remember a Charity, said:

“With more and more charities moving into the market, fundraisers will need to ensure that legacies are firmly on the radar of their own supporter base and across their communication channels if they are to maximise that growth.

This means continuing to champion the message and conveying just how important that income will be in supporting their mission for generations to come.”

Jamie Lennox