Charitable bequests are expected to rise by more than one-third this year after the UK recorded its highest number of deaths for more than a century, according to new forecasts.
An updated market forecast by the charity legacy consortium Legacy Foresight includes the latest information for the vaccine rollout, the recent performance of the housing market and the latest evidence on delays across the estate management system.
Legacy income fell by 11 per cent in 2020, but is expected to recover this year, according to the research.
Preliminary data suggests there were 690,000 deaths in the UK in 2020, which is the highest level recorded since the flu pandemic and the conclusion of the First World War in 1918.
This spike in the number of deaths, combined with the delays still affecting the estate administration processes, means bequests could peak at record levels in 2021, with estimates suggesting a rise of about 34 per cent, according to Legacy Foresight.
But the consortium suggests this growth depends on the resolution of delays experienced during 2019 and 2020 in the estate administration process.
Meanwhile, continued growth in house prices means average bequest values are likely to be sustained in 2021, although a decline of about one per cent is expected the following year.
The legacy consortium predicts growth will continue at a rate of seven per cent in 2022, and the five-year outlook also remains positive.
Between 2021 and 2025, Legacy Foresight expects legacy income to be 18 per cent to 24 per cent higher than it was over the previous five-year period, reaching between £3.7bn and £3.9bn by 2025.
In addition, it expects about 15 per cent more charitable bequests to be made over the same period, driven by the impact of Covid-19 and long-term demographic changes affecting death rates.
The legacy consortium warned that significant short-term uncertainty remained, due to both the ability of the whole estate management system to resolve ongoing administrative delays and broader external factors related to the pandemic and the wider economy.
Jon Franklin, economist at Legacy Foresight, said: “The prospects for the legacy market in 2021 are promising, with an expectation of an increase in the numbers of gifts, recent house-price growth driving up the value of these gifts and, ultimately, more legacy income.
“However, charities need to consider how they will manage uncertainty over the volume of legacy administration work they will need to deal with as well as the cash they receive.”