# New forecasts suggest more dramatic decline in legacy incomes this year

- Link: https://fundraising.co.uk/2020/04/28/new-forecasts-suggest-more-dramatic-decline-in-legacy-incomes-this-year/
- Published: 2020-04-28T10:31:51+01:00
- Author: Melanie May

**Legacy incomes could shrink between 8% and 27%, in 2020 by but will bounce back
significantly from 2021 onwards, according to Legacy Foresight’s latest projections.**

 

[Legacy Foresight](https://www.legacyforesight.co.uk/) has updated its projections
of the impact of the coronavirus on UK legacy incomes to take account of the latest
available economic, demographic and administrative evidence.

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All these factors have deteriorated since the last forecasts were produced at the
end of March, with economic commentators generally more pessimistic than a month
ago, a higher number of UK deaths than previously predicted, and the impact on solicitors,
charities and government departments capacity to process charitable bequests more
severe than previously assumed.

 

This suggests that there will be a more dramatic decline in legacy incomes over 
the coming year. However, the negative impact is expected to be relatively short-
lived, and Legacy Foresight’s forecasts for the next five years continue to suggest
market growth, with legacy incomes ending the five years 13% to 18% up on 2019 levels.

 

As in March, two alternative five-year scenarios for the UK legacy market have been
developed. One is a relatively optimistic scenario, which assumes that the government’s
Covid-19 response is more successful with the second more pessimistic.

 

 

#### Key findings

 

 * Legacy incomes could shrink in 2020 by between 8% and 27%, but they will bounce
   back significantly from 2021 onwards.
 * The average value of residual bequests could fall by 2-4% in 2020, although they
   will recover back to 2019 levels by 2022-2023.
 * 5-10% of bequests that we would otherwise have expected to be notified in 2020
   could be delayed due to administrative challenges, and up to a quarter of residual
   cash income will be deferred from 2020 to future years as a result of delays 
   in selling property assets.
 * Overall bequest numbers are likely to be around 0.5-0.8% higher over the next
   five years than pre- COVID-19 forecasts would have anticipated.
 * Over the entire 5-year period, legacy incomes will be between 2% and 5% lower
   than pre-COVID-19 estimates.
 * Legacy incomes are still expected to grow over the next five years, increasing
   from around £3.2bn in 2019 to £3.7bn-£3.8bn in 2024; a rise of 13%-18%.

 

Jon Franklin, Economist at Legacy Foresight, commented:

 

> “These forecasts show a more dramatic decline in legacy income, especially over
> the coming year. But despite the enormous uncertainty and significant negative
> impact in the short term, it’s important to recognise that legacy incomes are 
> still expected to grow over the next five years.”

 * **[Demand for Will-writing services rises during pandemic](https://fundraising.co.uk/2020/06/09/demand-will-writing-services-increases-during-pandemic/)**(
   9 June 2020)
 * **[Charitable estates fell 12% in 2019](https://fundraising.co.uk/2020/06/10/charitable-estates-fell-12-in-2019/)**(
   10 June 2020)
 * **[Latest legacy income forecasts rise slightly in optimism for 2020](https://fundraising.co.uk/2020/06/15/latest-legacy-income-forecasts-rise-slightly-in-optimism-for-2020/)**(
   15 June 2020)

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