Charities’ legacy income will remain flat at around £3.9m a year until 2027, according to consultancy Legacy Foresight, despite an increase in bequests.
The consultancy’s £3.9m forecast in its outlook for 2023-27 is lower than its previous prediction in October, which said that legacy income for charities would reach £4.2bn per year.
This downgrade, the company said, is due to a slower-than-anticipated economic recovery and struggling housing market.
Meanwhile, a separate report commissioned by Remember A Charity has reported that a quarter of wills now include a donation to a charity.
Bequests predicted to rise
Legacy Foresight predicted that charities will see around 145,000 bequests every year until 2027, an 11% increase on the average of 131,000 bequests seen between 2018 and 2022.
This is largely due to progress made in reducing the probate backlog alongside rising death numbers. According to the Office of National Statistics, there were 656,000 deaths last year in the UK, 1.2% higher than the previous forecast of 646,000.
The analysis also shows that a sluggish economy, driven by a fall in house prices and share price volatility, might result in lower average values of residual gifts by 2024, at 3% and 7% in the worst-case scenario.
In spite of this, legacy income will remain broadly stable at £3.9m a year, with no huge drops forecast.
Ashley Rowthorn, group chief executive officer at Legacy Futures, said: “The charity legacy market is becoming increasingly competitive with more organisations entering this space and, despite the volume of legacies increasing, the average gift value is likely to decrease, at least in the short term.
“Charities will need to understand market conditions, how these are affecting their supporters and be relevant in their fundraising to secure legacy income for the future.”
More people leaving charitable bequest
Separately, an annual study published by Savanta reveals that the number of wills containing a charitable bequest has steadily risen since 2014, from 16% to 24% last year.
Around three-quarters (73%) of professional advisers said they have seen communications about charitable gifts in wills or heard of Remember A Charity before.
The main barrier to legacy giving for clients is wanting to pass on all of their assets to their family/friends (83%) followed by difficulty in choosing a charity to support (38%) and fears that it may cause disputes/concerns between friends/family members/potential beneficiaries (38%).
Lucinda Frostick, director at Remember A Charity, said: “When it comes to growing legacy giving, engagement and support from across the will-writing community is crucial. This benchmarking study charts a continual rise in the proportion of wills made through solicitors and will-writers that include a charitable gift and that’s so important for charities that rely on legacy income. These donations may not arrive for some years yet, but they will fund vital services and charities’ core costs for generations to follow.”
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