Legacies still set to peak in 2021 despite revised forecast

Legacies are set to peak during 2021, with a third more donated to charities as bequests than the previous year, according to latest estimates.

The estimates have come from consultancy Legacy Foresight, which predicts bequests will reach record levels this year, around 35% and 36% higher than in 2020.

This revises a previous estimate, by Legacy Foresight in December last year, which suggested that bequests could increase by between 37% and 50% in 2021 compared to last year.

The highest number of deaths in the UK, since 1918 at the end of the first world war and the Spanish Flu epidemic, is a key factor in the growth.

Another factor in the prediction is the assumption that delays experienced during 2019 and 2020 around the estate administration process will be resolved this year.

Continued growth in house prices is set to see the value of the average bequest sustained this year. However, if the property market begins to decline in 2022, there could be a fall of 1% in the average legacy value.

While the value of legacy income fell by 11% in 2020 this is set to recover in 2021, says Legacy Foresight.

The value of legacies is set to grow by 27% in 2021 and continue at a slower rate of 7% in 2022.

Over the next five years (2021-2025) Legacy Foresight expects legacy income to be between 18% and 24% higher than the equivalent period between 2016 and 2020. This could reach between £3.7bn and £3.9bn by 2025.

“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,” said Legacy Foresight economist Jon Franklin.

“However, charities need to consider the significant risks to this growth posed by the ongoing delays throughout the estate administration process and consider how they will manage uncertainty over both the volume of legacy administration work they will need to deal with as well as the cash they receive.”

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