Legacy income is expected to bring in an average of £4.2bn per year for charities, Legacy Foresight has predicted.
This is a 26% increase on the average legacy income of the previous five years. The company's Legacy Market Outlook 2022-2026 has calculated this projection by analysing factors in legacy trends and the predicted number of deaths.
Jon Franklin, chief economist at Legacy Foresight, said: “The underlying drivers of legacies remain robust and even in our most pessimistic scenario we expect to see considerable growth both in the number and value of legacy donations for charities.”
Charities' legacy income dropped significantly in 2020 due to pandemic-related administrative delays – with that year seeing an 11% drop in income.
While legacy income bounced back in 2021, it was still lower than Legacy Foresight had predicted. Franklin, said this was partly due to ongoing estate administration issues that delayed the release of probate funds to charities.
Legacy Foresight predicts that charities will see an average of 134,000-137,000 bequests per year over the next five years.
In 2020, there were 689,000 deaths in the UK. This dropped to 666,000 in 2021, but this is still 10% higher than pre-pandemic levels. The Office of National Statistics predicts the number of UK deaths to remain slightly elevated this year.
Franklin said: “Usually we see a close relationship between the number of deaths and bequests, but that hasn’t translated here – and that’s largely due to delays in the estate administration processes. This is not just at probate, but the backlog in registering deaths, preparing estates and IHT processing too.
“While the timings and extent of this shortfall is uncertain, there may well be another 30-40,000 bequests in the system. So, we’re expecting to see some element of catch-up as more of these work their way through the system and that could be a welcome boost for charities.”
House and share prices are still on the rise with the value of residential bequests expected to increase by around 13% over the next five years. However, the crisis in Ukraine is set to create uncertainty in the financial market, from stocks to bequests.
Rob Cope, director of Remember a Charity, said: “With more and more charities moving into the market, fundraisers will need to ensure that legacies are firmly on the radar of their own supporter base and across their communication channels if they are to maximise that growth.
“This means continuing to champion the message and conveying just how important that income will be in supporting their mission for generations to come.”
WaterAid is one charity already focusing on this area. It launched its first TV advert dedicated to legacy-giving last month. Legacy fundraising makes up for around 10% of the charity’s total income.