Charities are set to receive £500m more in legacy income over the next five years than was previously estimated.
Legacy Foresight, which provides insights into the UK legacy market, updated its five-year market forecast yesterday to include the latest economic data and revised death predictions, which are the two main drivers of legacy income.
The company now predicts that total UK legacy income will increase from £3.2bn in 2019 to £3.9bn in 2024, representing annual growth of about 3.6 per cent. This will generate £18.1bn in total over the five-year period.
Last year it predicted 3.3 per cent annual growth, resulting in £17.6bn over the five-year period, £500m less than is now forecast.
Legacy Foresight updated its forecast to take into account the post-Brexit economic outlook and revised Office for National Statistics death rates.
GDP is now expected to grow from its current 1.3 per cent to 1.7 per cent from 2021 onwards. House price growth is expected to accelerate to about 3.6 per cent by 2024, and this increased wealth is expected to encourage people to leave more to charities in their wills.
ONS figures published in October predicted that deaths would rise from about 600,000 a year in 2019 to 645,000 a year in 2024, which would lead to an increase in the number of charitable bequests from about 120,000 in 2019 to more than 130,000 by 2024.
Jon Franklin, economist at 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 a 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 Foresight has also published the latest results from its Legacy Monitor programme, which is based on data supplied by a consortium of 82 charities.
The results show that in the year to December 2019 consortium members received cash legacy income of £1.58bn.
This constituted a 6.6 per cent increase on 2018, which seems impressive at a time of subdued house price growth and falling bequest numbers.
But Richard Hill, programme manager at Legacy Foresight, said the figures were deceptive.
“We believe that some unusually large bequests bolstered income growth in early 2019,” Hill said.
“We saw total bequest numbers down by 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.
“These delays now appear to be lessening, with a backlog of about 3,200 bequests to be processed over the coming months. Legacy notifications should return to normal levels during 2020.”