This briefing provides an updated view of the prospects for the UK legacy
market to 2025, incorporating our latest scenarios for how the vaccine
rollout, the recent strong performance of the housing market and the
latest evidence on delays across the entire estate management system
will affect the market going forwards.

These scenarios incorporate a more optimistic medium-term outlook for
the legacy market than our November forecasts. However, significant
short-term uncertainty remains due to both the ability of the whole estate
management system to resolve ongoing administrative delays and
broader external factors related to the pandemic and the wider economy.
Legacy Foresight will continue to monitor developments and provide
further updates on potential impacts on the UK legacy market as
appropriate.

• Charitable bequests are expected to spike significantly this year
  Preliminary data suggests there were 690,000 deaths in the UK in 2020 this is the highest
  level seen since the Spanish Flu epidemic and conclusion of the First World War in 1918.
• This spike in the number of deaths, combined with the delays still affecting estate
  administration processes, mean that bequests could peak at record levels in 2021 around
  35%-36% higher than in 2020. However, this growth depends on the resolution of delays
  experienced during 2019 and 2020 in the estate administration process.
  Average residual bequest values will be sustained through 2021
• The continued growth in house prices is expected to sustain average residual values in
  2021, although there is potential for them to decline by around 1% in 2022 if the housing
  market does begin to decline as expected.
  Cash legacy income will recover from 2021 onwards
• We estimate that legacy income in the UK fell by around 11% in 2020, reflecting the
  sustained shortfalls in bequests over the last two years.
• We expect legacy incomes to recover in 2021, with a central growth estimate of 27%, as
  income starts to flow from the anticipated recovery in bequest volumes.
• This growth will continue in 2022 with further growth expected in our central case of 7%.

Total UK legacy cash income, £bn

The 5-year outlook remains positive

• Over the five-year period 2021-2025 we expect legacy income to be 18%-24% higher than it
  was over the equivalent five-year period 2016-2020, reaching between £3.7bn and £3.9bn
  by 2025.
• Likewise, we expect to see around 15% more charitable bequests over the 5 years 2021-
  2025 compared to the previous 5 years 2016-2020, driven by the impact of Covid-19 and
  long-term demographic changes on the number of deaths.