UK legacy market worth £2.96bn in 2017 but hard Brexit could affect future growth
Melanie May | 5 November 2018 | News
The total UK legacy market was worth £2.96 billion in 2017, according to Legacy Foresight’s 2018 Legacy Market Outlook report, with modest growth predicted over the next five years and a risk of lower growth in the event of a hard Brexit.
The £2.96 billion represents around 3.5% of all the money left in estates, up from around 3% a few years ago. Legacies now account for 15% of all fundraised income and 6% of all income received by British charities.
Health remains by far the largest sector, accounting for 38% of total legacy income. Other important sectors are animal charities, receiving 15%, conservation and disability, each receiving 8% of all UK legacy income.
The Legacy Market Outlook report also looks at the five-year forecast for legacies, and pinpoints rising death rates and economic uncertainty as the most critical trends that it expects to affect both the number and the value of legacies received by UK charities over the next five years.
While death rates have been falling, according to ONS figures annual UK deaths will top 600,000 a year from 2020 onwards, climbing rapidly to reach 628,000 in 2026 and 708,000 in 2036. Based on this new data, Legacy Foresight has adjusted its forecasts of legacy bequests upwards, rising from 118,000 in 2017 to 124,000 in 2022.
Legacy Foresight has also prepared several market forecasts considering the various possible outcomes of the Brexit negotiations. If a Brexit deal can be reached by the March 2019 deadline, it puts the outlook for the UK legacy market over the next five years as fairly modest with a growth of 2.4% per annum, or less than 1% per annum after inflation. This means that the value of the UK legacy market will reach £3.4bn by 2022, and cumulatively over the next five years the sector will receive £15.8bn in legacy income from a total of 610,000 bequests.
With a ‘hard’ Brexit, or no deal at all, Legacy Foresight estimate that incomes over the next five years will total £14.6bn; £1.2bn less than if a deal is reached.
Meg Abdy, Development Director of Legacy Foresight said:
“In the short term, uncertainty is already having an impact on economic growth and on house prices – this, in turn, impacts residual legacy values. With residual bequests making up 85% of income this will affect legacy incomes overall. The difference between a good and a bad Brexit for the UK legacy market is not insignificant. We’ll continue to monitor the situation and issue new forecasts if required.”
Rob Cope, Director of Remember A Charity, commented:
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“Legacy Foresight’s report underlines just how important charitable bequests are to the sector now and in the future.
“Gifts in wills are the largest source of all voluntary income, and it’s by no means just the largest or long established charities that are on the receiving end. Growth is seen across the sector and this is testament both to the public’s appetite for leaving a lasting gift, as well as to the hard work and collaboration of fundraisers.
“While Brexit and wider economic uncertainty may indeed have an impact on future legacy trends, the outlook remains positive with more and more charities benefitting from gifts in wills.”
About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.