The legacy income growth rate in the year to the 31 March 2018 has stalled, despite overall income going up, according to the latest bulletin from Legacy Foresight.
The latest Legacy Foresight data shows that while the income of its 83 monitor members saw a like-for-like increase of 4.6 per cent to £1.5bn in the 12 months to the 31 March, growth rates have slowed in that time.
Legacy Foresight also said that overall income has actually fallen somewhat since it reported its figures for the first quarter of 2018 in February.
The consortium has laid the blame for this slowdown on the UK economy, citing recently released figures from the Office for National Statistics which showed a miserly 0.1 per cent growth in GDP over the first three months of 2018.
“While part of the slowdown was a result of the very cold weather due to the triple instalment of the ‘Beast from the East’, economists also identified underlying signs of weakness among households, stemming from the squeeze on incomes caused by the slump in sterling in 2016 and also the uncertainty from businesses ahead of Brexit next year,” said Legacy Foresight.
The “subdued economy” is also likely to continue to have an effect on both house and share prices, which will in turn drive down average residual values.
However, the organisation’s 83 consortium members reported an increase in the average value of cash gifts to £4,150 in the year to March, but this was not quite enough to offset the fall in residual values to £59,700 from above £60,000 three months ago.
The consortium also reported a slowdown in bequest numbers, reporting a total of 52,981 in the year to March 2018, down by 1.2 per cent on the same period last year.
Legacy Foresight said a fall in bequests would “likely suppress legacy income over the next few quarters” but predicted “sadly, the latest mortality statistics show a significant increase in deaths over the long, cold winter of 2017/18” which could feed through to higher legacy notifications later in the year.