Legacy giving will be worth £500m more than previously forecasted over the five years between 2019 and 2024, Legacy Foresight has said.
The legacy consortium has adjusted its predictions to account for the higher number of deaths forecasted by the Office of National Statistics (ONS) and for post-Brexit economic conditions.
Last year, Legacy Foresight projected legacy income to grow by 3.3 per cent year on year between 2019 and 2024. It now forecasts a 3.6 per cent yearly growth that will increase the value of legacy giving from £3.2bn a year in 2019 to £3.9bn in 2024.
Legacy Foresight says this means that “cumulatively, based on these new forecasts, UK charities will receive £500m more over the five years than previously thought”.
Number of deaths and GDP growth to boost the market
Last October, the ONS published its latest population projection figures, anticipating that the number of deaths will increase from around 600,000 per year in 2019 to around 645,000 per year in 2024. According to Legacy Foresight, this means charitable bequests will grow accordingly, from about 120,000 a year in 2019 to more than 130,000 by 2024.
Acceleration of GDP and house prices growth should also impact legacies positively. GDP is expected to grow by 1.7 per cent from 2021 onwards, “boosted by rising consumer and business confidence” once Britain is out of the EU, and house prices are forecasted to increase at a 3.6 per cent yearly rate by 2024.
Jon Franklin, economist, Legacy Foresight, said: “For now, legacy market growth will not return to the levels seen in the run-up to Brexit when incomes were growing at 4.1 per cent per year. However, at a time when many charities are reporting flat or falling donations, these forecasts are welcome news for fundraising teams across the UK.”
Legacy notifications were down in 2019, but income grew
Legacy Foresight also reported a 6.6 per cent rise in cash legacy income in 2019 compared to the year before, with its 82 consortium member charities raising a collective £1.58bn from legacies. This is despite a significant fall in the number of bequests in 2019.
Richard Hill, programme manager, Legacy Foresight, said: “We believe that some unusually large bequests bolstered income growth in early 2019. We saw total bequest numbers down 9 per cent on 2018 figures. We estimate that 3 per cent of this fall was due to a short-term reduction in deaths after the unusually severe winter of 2018/19. The remaining 6 per cent drop was caused by the widely reported delays at probate courts.
He continued; “These delays now appear to be lessening, with a backlog of around 3,200 bequests to be processed over the coming months. Legacy notifications should return to ‘normal’ levels during 2020.”