Figures for 2019 Q3 from Legacy Foresight’s Legacy Monitor show bequest numbers are down by 8% year on year, across the consortium of 80 member charities.
The analysis shows that the majority (6%) of this decline is due to the impact of delays at HM Courts & Tribunal Service, caused by the transition to the new probate service, once long-term trends and changes to the numbers of deaths have been taken into account.
Chris Farmelo, Legacy Foresight‘s Technical Director, said:
“Ongoing delays caused by the introduction of the new structure and processes at HMCTS have been affecting legacy income and bequest figures for the past 9 months, which we’ve highlighted in Legacy Monitor quarterly bulletins throughout the year.
“Once the backlog is cleared, charities can expect a significant boost to bequest numbers to compensate for the shortfall in bequests experienced this year. For Legacy Monitor Consortium members specifically, who make up over 50% of the legacy market overall, this increase looks to be substantial; estimated at around 24% higher in October to December than would otherwise have been the case.
Bequest notifications to charities were down by 8 per cent year on year in the third quarter of 2019, according to new data from Legacy Foresight.
The company that provides insights into the UK legacy market revealed the figure in its latest Legacy Monitor quarterly bulletin, which was published last week.
The bulletin, which is based on information provided by a consortium of 80 charities, attributes about three-quarters of the 8 per cent decline to continuing delays in changes to the probate service, such as the closure of regional offices and the implementation of a new IT system.
But the situation appears to be easing: bequest notifications were 24 per cent down year on year in the second quarter, with about three-quarters of this attributed to the delays. And charities can expect to see strong year-on-year growth of 24 per cent in the final quarter as the delays are resolved.
The latest Office for National Statistics (ONS) on ‘Families and Households in the UK: 2019’ make insightful reading for the Wills community which highlights the changing trends in Brits’ living arrangements, including families.
The most interesting factors emerging from the latest Families and Households in the UK which could impact on the Wills sector are multi-family households (consisting of two or more families) is the fastest growing household type over the last two decades to 2019.
Furthermore, over the last 10 years the proportion of families containing a cohabiting couple increased from 15.3% to 18.4%.
In addition, same-sex families are up by 40% since 2015, plus the number of people living alone has increased by a fifth over the last 20 years.
Looking at the statistics, we asked professionals in the industry to give their views on how changing household composition could impact on Will making.
Legal technology within the Wills and Probate industry has evolved and is now transforming the world of legacy giving.
With technology changing the way the world communicates, its impact on business has been huge, fast-moving and continues to grow.
Those who work with Wills have started to see legal technology as a game-changer which can act as a driving force for increased efficiency and profitability.
It is only a relatively short space of time where those who draft Wills would have previously relied on simplistic software and written notes or paper instructions.
But the legal sector is now catching up to what clients expect with more and more firms/businesses looking at new systems so they can be more efficient. Using new technology has allowed businesses to grow, provides a much better service, saves time and in turn increases their revenue.
Those firms which have adopted legal tech in their will-making processes are revolutionising the face of legacy giving. Of course, there are other factors in play but essentially, new technology makes the process simpler, more efficient and cost-effective.
According to a recent report launched by the leading analysts of legacy fundraising, Legacy Foresight, predicts that Legacy and in-memory donations to UK charities will be worth twice as much in real terms in 25 years’ time, reaching £10 billion by 2045. This is largely due to more deaths, more will-making and a higher proportion of people leaving bequests.
Other than reducing IHT, the top charitable bequest motives are a desire to support a charity and the ultimate use of the gift by the charity, according to Legacy Voice and University of Plymouth’s Legacy Giving 2018 report. Interestingly, findings from the report cited the most significant changes in donor motivation was the increase in influence of professional advisors. A similar study was conducted in 1992 which found only 4% of participants had confirmed that a legal professional had suggested a bequest, but the figure climbed to 21% in 2000.The report suggested that by 2017 this figure would have crept up even higher.
Legacy income for charities is set to rise by 4% over the next five years with charities set to receive legacy increases in excess of £650 million.
Unfortunately, this increase in legacy income also coincides with a fall in life expectancy, according to recent death projections forecast by the Office for National Statistics (ONS).
The new report suggests that life expectancy is currently slowing for both men and women since 2011 following decades of consistent improvements.
This will lead to a noticeable rise in the number of projected deaths. ONS predictions estimate that 3.1 million people will die in the UK during the next five years up to 2024.
When compared with the last forecast prediction made in 2017 of 3 million deaths, it signifies that declining life expectancy rates could indicate a further 123,000 additional deaths not estimated in previous reports.
In terms of charitable legacies over the next five years, this could signify an increase of 4.1% or £650 million.
Legacy foresight has estimate that this could mean 26,000 additional people will die per year, each leaving an average legacy of £25,000, leading to an annual legacy income increase of £130 million.
Meg Abdy, Development Director at Legacy Foresight, says:
“Death rates are one of key factors that determine the number and size of bequests charities can expect to receive. In the short to medium term these new projections will boost charity income, especially among larger charities.”
“It’s important to remember that although improvements in life expectancy are not as optimistic as previously thought, people will still live longer on average than they do today. By 2050 1.5 million people will be aged 90 or over. This may be lower than the 1.8 million predicted back in 2016, but it’s still more than double the 600,000 we see today.”
A predicted rise in legacy giving over the next five years suggests charities are set to increasingly focus their fundraising activity on encouraging people to leave gifts in their will.
Legacy donation analyst Legacy Foresight believes there will be an extra 26,000 bequests from wills by 2024, with an average value each of £25,000. This could mean an extra £650m more legacy income for charities over the next five years.
The Legacy Foresight analysis follows latest death projections from the Office for National Statistics that by 2024 there will be 3.1m deaths, compared to 3m predicted in their last projections two years ago.
“Death rates are one of the key factors that determine the number and size of bequests charities can expect to receive,” said Legacy Foresight Development Director Meg Abdy.
“In the short to medium term these new projections will boost charity income, especially among larger charities.
New death projections from the Office for National Statistics published at the end of October will mean £650 million more in legacy income for UK charities over the next five years, according to analysis by Legacy Foresight.
This is an uplift of 4%, with Legacy Foresight predicting that bequests, or gifts to charities in Wills, should grow by an extra 26,000 in the five-year period, with an average value of £25,000.
According to the ONS’s figures, life expectancy increases have slowed considerably for both men and women since 2011, which in turn will drive up the projected number of deaths. Its latest forecasts predict that over the five years to 2024, 3.1 million people will die, compared to the 3.0 million anticipated in its last projections, produced in 2017.
Legacy Foresight says the new figures from the Office for National Statistics could lead to a 4 per cent increase in the value of charitable bequests
A rise in the number of deaths predicted by the Office for National Statistics over the next five years will result in £650m more legacy income for UK charities, according to Legacy Foresight.
The ONS figures, published at the end of last month, predict that 3.1 million people will die over the next five years to 2024, a rise from the three million deaths predicted in the last set of figures, produced in 2017.
The legacy consortium Legacy Foresight said the extra 123,000 predicted deaths would result in an increase of 4 per cent in the total value of legacy gifts to charities, to £16.25bn.
Legacy Foresight estimates there will be an extra 26,000 gifts, with an average value of £25,000.