Legacy income 'could fall by more than a quarter this year'

Having in March predicted a fall of up to 9 per cent, Legacy Foresight now says income from wills could fall by up to 27 per cent

Charity legacy income could shrink by more than a quarter this year because of the effects of the coronavirus pandemic, experts have predicted.

The charity legacy consortium Legacy Foresight said at the end of March that legacy income could fall by between 3 and 9 per cent over the following year because of the Covid-19 outbreak.

But the latest figures from the consortium estimate that legacy income, which was worth £3.2bn in 2019, could shrink by between 8 and 27 per cent this year because of the virus.

Legacy Foresight said that between 5 and 10 per cent of bequests it would normally expect to be notified to charities in 2020 could be delayed because of administrative difficulties caused by Covid-19.

Up to a quarter of residual cash income would be deferred from 2020 to future years as a result of delays to property sales, it said.

But Legacy Foresight added that it expected legacy income to bounce back significantly in 2021 and would still grow over the next five years, rising to between £3.7bn and £3.8bn in 2024, a rise of between 13 and 18 per cent over the period.

This is, however, between 2 and 5 per cent lower than was estimated in February, before the pandemic took hold.

Jon Franklin, economist at Legacy Foresight, said: “These forecasts show a more dramatic decline in legacy income, especially over the coming year.

“But despite the enormous uncertainty and significant negative impact in the short term, it’s important to recognise that legacy incomes are still expected to grow over the next five years.”

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