Legacy income set to increase for charities

Making a will web

Legacy Foresight have said the outcome of Brexit will effect what increase organisations see

25th September 2017 by Gareth Jones 0 Comments

Legacy income for charities could be set to increase over the next five years.

Analysts Legacy Foresight have predicted that the figure will grow by an average of 2.7% a year for charities. This means the figure for the UK sector will rise from £2.82 billion this year to £3.26 billion in 2021 .

The firm has said however that the outcome of Brexit could lead to varying scenarios.

Chris Farmelo, director at Legacy Foresight, said: “The good news is that we do not expect to see a return to the situation following the global financial crisis in 2008 when sector incomes fell and then stagnated. In fact, the number of bequests received by UK charities is predicted to rise over the coming years, due to the climbing death rate.

“However, the value of those bequests will grow much more slowly than of late, due to the uncertain economic situation. From 2017 to 2021 the average residual bequest (now worth around £46,600) will grow by just 1.3% a year, compared to 2.8% a year over the five years 2012 to 2016.”

Legacy Foresight has produced a range of market forecasts for the next five-year period – ranging from pessimistic to optimistic. These variations are based purely on alternative economic scenarios surrounding Brexit – the assumptions on underlying demographic and social factors are left unchanged.

So, while the central scenario predicts 2.7% per year market growth over the next five years, the pessimistic scenario, which assumes a poor Brexit deal, suggests growth of just 0.9% a year. At the other end of the spectrum, the optimistic scenario – which assumes a far better Brexit deal is brokered – suggests 4.2% p.a. market growth.

Based on this analysis, a poor Brexit deal could result in UK legacy income being £500m lower in 2021 than if Britain negotiates a very good Brexit deal.

Rob Cope, director of Remember a Charity, said: “These potential scenarios from Legacy Foresight are hugely insightful and will help charities to plan for a range of eventualities as the impact of Brexit unfolds.

“While there might be little the sector can do to influence the wider economy, we can however, continue to work together to grow legacy income by normalising charitable giving in wills. Only by helping charities make more noise about legacies and their impact, can we ensure that legacy giving will become an even more important income stream to the sector for decades to come.”