Charity legacy income is expected to reach £6bn a year by 2050, new research predicts.
The legacy consortium Legacy Foresight’s annual market briefing, published today, forecasts that an expected rise in deaths and a return to house price growth from 2025/26 will boost legacy income from the current value of about £4bn a year.
Legacy Foresight’s Legacy Monitor, a programme that tracks the growth of the legacy market using data from more than 80 charities, estimates the annual growth of legacy income will be a record-breaking 6.5 per cent over that period.
But the research warns that current economic conditions are likely to negatively impact growth in the coming months.
Jon Franklin, an economist at Legacy Foresight, said: “Recent growth in legacy income has been helped by a buoyant housing market that supports the value of legacy gifts.
“However, this is likely to be a short-lived boost, as the housing market has already started to fall, and we expect to see this negatively impact average legacy values over the next year.”
Falling house prices negatively effect average gift values and the time it takes for charities to receive gifts as people delay in selling houses while they hold out for prices to rise.
Another contributing factor is a delay in an estimated 70,000 bequest cases that are held in probate processing at His Majesty’s Courts and Tribunal Service.
This has led to an estimated £900m in legacy fundraising “caught up in the backlog”, according to Legacy Foresight.
There were 681,000 deaths in the year ending March 2023, an increase of 50,000 on the previous year, with the total number expected to increase to 800,000 a year by 2050 due to the ageing baby boomer generation.
Legacy Foresight believes this increase will result in “a further challenge” for the probate administration service but will also boost overall legacy income.
Issues with the probate service and a projected fall in house prices in the next two years mean that legacy income is expected to drop slightly, to just under £3.8bn in 2025/26 — a fall of 5 per cent, the consortium predicts.
Kathryn Horsley, director of insight at Legacy Foresight, said: “While a fall in legacy income isn’t good news, it’s worth noting that this reduction is fairly small and comes at a time when other forms of fundraised income are under even more pressure due to donors feeling the squeeze of the cost-of-living crisis.
“Given this, legacy income will remain a resilient source of income during the challenging next few years.”
Legacy Foresight’s research is based on data from 82 charities, which receive £1.7bn in legacy income between them each year, as well as analysis of economic and demographic trends.