Legacy Foresight has updated its projections of the impact of the coronavirus on UK legacy income, to take account of the latest available economic, demographic and administrative information. While legacy cash income is likely to be hit hard in 2020, over the five year forecast period legacy income is expected to grow to £3.6-£3.8 billion by 2024.
Overall, the latest forecast for 2020 is slightly more optimistic than its predictions from April. The revised assessment takes into account the latest economic data, demographic updates on the scale of deaths resulting from the crisis and latest evidence about the speed in which charitable Wills are being administered. Legacy Foresight reports that solicitors, the probate service, charities and other organisations involved in the processing of wills have adapted relatively quickly to the current crisis.
Jon Franklin, economist at Legacy Foresight, says:
“Our scenarios now suggest that legacy cash income could fall by between 4% and 23% in 2020, reflecting the economic environment as well as the delays in the sale of property assets from estates caused by a slow-moving housing market. However, as administrative delays unwind and income starts to flow from the anticipated increase in bequests, it’s likely that income could rise quite rapidly during 2021 and 2022.
“We recently analysed cash legacy income from 12 Legacy Monitor charities in the first six weeks of lockdown. Across the sample, like for like cash income was down by 18% on 2019. Although this fall is significant, it’s not as severe as expected, which is heartening news for legacy managers and finance directors. We expect the situation to improve over the coming months, as charities continue to adapt their systems for collecting cash and recording bequest numbers in the new environment.”
Rob Cope, director of the UK’s national legacy consortium Remember A Charity, adds:
“Voluntary income will often come in peaks and troughs, but this year has been more uncertain than ever. Despite the challenges to estate values, it’s legacy income that has sustained many charities and frontline services throughout the crisis. This long-term income stream will become all the more important in the months and years ahead.
“The pandemic has made it exceptionally challenging for charities to raise the topic of legacy giving with supporters at a time when mortality is very much front of mind. But by working together, we have the opportunity to convey the importance of gifts in Wills collectively and secure vital charitable services now and long into the future.”
Legacy Foresight will continue to monitor this highly uncertain situation and provide regular updates to the sector as and when significant new information comes available.