Legacy income will reach a record £4bn by the end of the year – but charities are still waiting for £300m that is “stuck in the system”, experts have said.
The latest research from Legacy Foresight, using data from 82 charities, forecasts that legacies will be worth £4bn in 2022, an increase of 14 per cent on 2021.
Inflation means it is a rise in real terms of 2.6 per cent, the researchers said.
Legacy income is likely to remain at this level for the next two years, partly as a result of falling property values, and is then expected to grow again, driven by higher numbers of deaths in the population in the years ahead.
The research found that legacy income is growing most rapidly among international development charities, where it is forecast to be 6.5 per cent higher in 2022 than it was in 2021.
Legacy income is up 5.2 per cent among armed forces charities and 4.6 per cent for conservation and health charities, the data shows. It is lowest at children’s charities, with an increase of 1.3 per cent.
The research also says that legacy income could be boosted in the near future by donations which have been caught up in long-term delays.
It says: “The other factor impacting bequest numbers in the short term is the potential bounce back of bequests that are still stuck in the system as a result of issues in the estate administration process that started in 2019.
“While problems in the administration process have mostly been resolved and bequests are back to the levels we would expect to see based on the number of deaths, we still haven’t seen the catch-up of the missing bequests.
“We believe that the equivalent of more than £300m of legacy income is still stuck in the system and the timing and extent of this recovery is a significant source of uncertainty for the legacy market over the next few years.”
Jon Franklin, economist at Legacy Foresight, said: “Although in the near term we are more cautious about the outlook for legacy income over the next five years, we expect negative impacts to be short-lived, and to see a return to growth after 2024 driven by rising bequest numbers and a steadying of the housing market.”
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.