Legacy income continued to grow at a rapid rate in the 12 months to June 2022, according to new Legacy Monitor figures.
Data from the Legacy Monitor benchmarking programme from Legacy Foresight (part of Legacy Futures) reveals that legacy income received by the 82 consortium members totalled £1.69bn over this period, maintaining the previous reported trend. This was also 15% higher than the level reached over the prior 12 months, due to rising bequest values.
The analysis shows that the average value of residual gifts received across the consortium increased by 7.3% over the last 12 months, bolstered by the continued rise in house prices. ONS data shows that the average UK house price rose by 12.8% in the 12 months to May 2022, with particularly rapid growth in the South West, East Midlands and East of England. Legacy Futures expects the ongoing rise in house prices to continue to support strong growth in residual gift values over the next 12 months.
Looking forwards however, it suggests that if a slowdown in the housing market occurs as interest rates rise and consumer confidence falls, the UK may see some impact on legacy income with more measured growth over the medium term.
Legacy Futures Economist Jon Franklin said:
“With house price growth set to slow, and potentially even reverse, the sector should prepare for a period of more sluggish legacy income growth through 2023 and 2024.”
While bequest values continued to increase, supported by the continued rapid growth in house price, bequest numbers were around 1.3% lower over the three months to June 2022 compared to the same period last year. However, this was broadly in line with expectations, given the number of deaths and volume of probate issued over the period.
Analysis suggests that there remains a backlog of around 24,000 probate cases at HM Courts and Tribunals Service (HMCTS). It does appear that HMCTS has made some progress over the last three months.
Legacy Foresight estimate that clearing the case backlog could generate around 11,000 further charitable notifications over the coming months.
“The last few years have been challenging, so this long term trend of growth is positive to see. Bequest numbers are high, although lower than we might expect, and if the backlog from HMCTS is reduced, there could be a real boom in numbers and income.”