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Bequests In U.K Expected To Make Big Jump

Average annual income from charitable gifts in wills in the United Kingdom (U.K.) is expected to grow by at least £4 billion [$5.24 billion USD] over the next five years and likely in the range of 20% to 30%.

The projection comes from the Legacy Market Outlook 2022-2026 by Legacy Foresight, the research and analysis arm of consulting firm Legacy Futures Group. The report factors in legacy trends, projected number of deaths and the most likely economic conditions, along with estate administration issues to predict the number and value of future charitable bequests in the U.K.

In its central scenario, legacy income is expected to bring in an average of £4.2 billion [$5.5 billion USD] per year for charities from 2022 to 2026 – a 26% increase on the average income from the preceding five years. Alternative scenarios range between £4.0 billion [$5.24 billion USD] and £4.4 billion [$5.77 billion USD] a year, for growth anywhere from 21% to 30%.

“There are several factors that will influence the legacy market over the coming years, not least the potential impact of the crisis in Ukraine on the stock market and elevated death rates linked to COVID,” Jon Franklin, economist at Legacy Foresight, said via a statement. “But the underlying drivers of legacies remain robust and even in our most pessimistic scenario we expect to see considerable growth both in the number and value of legacy donations for charities.”

Deaths in the U.K. dropped below their peak of 689,000 in 2020 to 666,000 in 2021 but last year’s figures remained 10% higher than pre-pandemic years of 2015-2019. Projections from the Office of National Statistics suggest the number of deaths will remain slightly elevated in 2022 before returning to “a more gradual long-term upward trend.”

There’s usually a close relationship between the number of deaths and bequests, according to Franklin, but that has not translated due to delays in the estate administration process. “This is not just at probate but the backlog in registering deaths, preparing estates and IHT processing too,” he said. Franklin estimated there could be another 30,000 to 40,000 bequests in the system. Over the next five years, Legacy Foresight predicts that charities will see an average of 134,000 to 137,000 bequests per year.

Legacy Foresight’s market forecasts are updated annually, with a detailed report provided to charities within the Legacy Monitor consortium, helping them to predict and plan legacy income.

Legacy Foresight is part of the Legacy Futures group of gifts in Wills and In Memory giving consultancies, alongside Legacy Voice and Legacy Link. Legacy Monitor, its flagship benchmarking service, has been operating since 2008, and now involves more than 80 British nonprofits.

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