Legacy income forecast predicts rise to £3.26bn by 2021
Melanie May | 28 September 2017 | News
Legacy income is expected to rise 2.7% over the next five years, to reach £3.26bn by 2021, according to Legacy Foresight’s latest market forecast.
Overall, Legacy Foresight predicts that legacy market growth will be considerably slower than in the five years leading up to the Brexit referendum when annual growth rates averaged 6.5% p.a. After taking into account rising inflation, growth in real terms will be less than 1% p.a, it suggests.
Due to the uncertainty surrounding Brexit, Legacy Foresight has produced a range of market forecasts for the next five-year period, from pessimistic to optimistic, based on alternative economic scenarios.
While the central scenario predicts 2.7% p.a. market growth over the next five years, the pessimistic scenario, which assumes a ‘poor’ Brexit deal, suggests lower growth of 0.9% p.a. At the other end of the spectrum, the optimistic scenario – which assumes a far better Brexit deal and a better economic performance than in the central scenario – 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, with Legacy Foresight predicting that a ‘poor’ Brexit will cost the sector £1.5bn in cumulative legacy income over the next five years, compared to a ‘very good’ Brexit.
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% p.a., compared to 2.8% p.a. over the five years 2012 to 2016”.
Rob Cope, Director of Remember A Charity said:
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“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.”
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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.