£800m of charity legacy income stuck in probate backlog, say experts

31 Aug 2023 News

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Charities are missing out on £800m pledged to their causes due to a “worsening” backlog of probate cases being processed, according to sector experts.

Legacy Futures’ figures from its latest monitoring report show that bequest numbers for the three months to June 2023 (14,000) were 6% lower than in the same period of 2022.

The consultancy said this drop is “likely to be down to the continued and worsening of the backlog” of cases at HM Courts and Tribunals Service (HMCTS).

According to the organisation’s analysis, the number of bequests waiting to be processed by HMCTS may have reached 60,000 at the end of June this year, equivalent to around £800m of potential funding for charities.

This reported backlog is despite HMCTS recruiting more than 100 employees between November 2022 and March this year intended to help clear it.

Potential for declines in legacy income

Legacy Futures said overall legacy income for charities was likely to remain “resilient” over the next five years.

According to its estimates, UK legacy income was £3.9bn in 2022-23, up from £3.6bn in 2021-22 and £3.2bn the year before.

It expects an increasing death rate to boost bequest numbers to around 145,000 a year, compared to 131,000 annually seen on average between 2018 and 2022.

However, the consultancy said legacy income could decline if delays at the probate service “are not reversed rapidly”.

It said the effects of HMCTS’s investment in staffing to clear the backlog “are yet to be felt”.

The consultancy said that a decline in house prices of around 2% between September 2022 and May 2023, and further forecasted drop of 11% over the next two years, could also have a negative impact on residual gifts.

‘Possible problems ahead’

Legacy Futures’ head of analysis Doug Clow said: “Legacies have been remarkably resilient over the turmoil of the last few years.

“We’ve had Brexit, estate administration problems including probate delays, Covid-19, and economic fall-out from the Russian invasion of Ukraine - particularly high inflation.

“In all that time, legacy income grew every year apart from 2019-20 and 2020-21. 2022 saw the positive upward trend continue, as expected.

“Sadly, we do see more possible problems ahead. HMCTS’s efforts to improve the backlog have yet to yield results we can see from the outside, and most economic forecasters expect further falls in house prices, which will pull down average gift values.

“However, we expect the impact from these problems to be relatively short-lived, and that legacies will continue to grow in the medium to long term.”

HMCTS: Prioritising complex cases

HMCTS told Civil Society that the probate service experienced a surge in productivity in March 2023, following its recruitment drive, processing the highest volume of grants (26,637) in a month since January 2020.

But the service said it continues to receive a lot of probate applications post-Covid due to the death rate having run higher than the five-year average until the end of summer 2022.

Over 90% of probate applications are completed digitally but the service said its focus was on trying to reduce the wait time for paper applications, which are more complex and take longer.

“We have recruited and trained 100 new members of staff to reduce waiting times for customers, prioritising those longstanding cases which are often complex and can take longer to process,” a spokesperson for HMCTS said.

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