Legacy income continues to show resilience and serves as a crucial source of funding for UK charities, even amid slower growth in recent years. In 2023/24, legacy income reached £4.1 billion—a modest 1.3% increase from the previous year.
This performance, though below the long-term growth trends, remains a major contribution to the charitable sector, particularly in light of ongoing economic and political challenges.
The findings come from Legacy Future’s Legacy Market Review — the sector’s annual benchmarking research programme, which gathers data from over 80 charities, accounting for almost 50% of the charity legacy market.
Key factors impacting legacy income
Slight decline in bequests: a lower-than-expected death rate of 643,400 for the year 2023/24 led to a reduction in bequest numbers of -0.8% on the year previous. The latest year’s death rate compares to 721,500 in 2020/21, and 681,500 in 2022/23.
Minimal increase in average bequest value: House prices have been a contributing factor in subduing the average legacy value to £28,900, a growth of just 0.4% on the previous year, and significantly below the long-term annual average growth of 3.1% since recording began in 1994.
Challenges from probate delays: in August 2023, the backlog at His Majesty’s Courts and Tribunals Service (HMCTS) peaked at nearly 70,000 pending bequests, equivalent to approximately £900 million – around a quarter of a year’s legacy income for the market. The backlog has since decreased to around 33,000 cases.
The current economic environment, including subdued housing growth and stable death rates, suggests that legacy income will hover around £4.1 billion annually over the next three years.
Substantial growth is forecast to resume around 2027/28. However, inflationary pressures continue to strain charities’ budgets, potentially eroding the true purchasing power of legacy income in real terms.
Adjusted for inflation, the actual spending capacity from legacy funds is projected to decrease by over 6% between 2023/24 and 2026/27, adding pressure on charities to optimise resources and manage cash flow carefully.
While the short-term outlook remains steady yet restrained, the future of legacy income is increasingly promising as the baby boomer generation approaches typical legacy-giving age. This demographic, characterised by higher-than-average wealth and a growing preference for charitable bequests, is anticipated to drive substantial growth. Another factor in projected growth is house prices, with the housing market expected to soar from 2027/28.
By 2050, legacy income for UK charities is expected to exceed £10 billion annually (Fig 5), marking a historic intergenerational wealth transfer that could boost the legacy giving market and create a secure and solid income stream to support charitable organisations for years to come. Ashley Rowthorn, CEO of Legacy Futures, suggests charities should be focusing now on their planning to be future-ready:
“The long-term outlook for legacy income is brighter than it has ever been, yet short-term challenges persist. While legacy income remains stable, inflation is impacting charities’ purchasing power, tightening budgets and cash flow. Charities must stay informed of the external drivers of legacy income to understand market influences on their performance and to plan effectively.
The time is now; investing in legacy fundraising today will allow charities the time to build and secure a lasting income stream into the future as the market develops and grows — a strategy that will help them navigate economic uncertainties and sustain impact for decades.”
Lucinda Frostick, Director of Remember a Charity said:
“Legacies are an increasingly vital income stream for a growing number of charities, strengthening resilience and sustaining charitable work through challenging economic times. This is a reflection of the dedicated focus given to legacies over the years, both within charities individually and in working collectively. As we look to the future and consider the anticipated growth of the legacy market, it shows how crucial legacy fundraising will be to ensure a thriving charity sector and charitable services for years to come.”
