- On November 26, 2019
YOU might be sick to the back teeth of hearing about Brexit, but there’s a piece of good news for charities that’s emerged from the debacle.
Legacy Foresight, the legacy fundraising analysist, has revealed that recent Brexit developments could mean a significant rise in legacy incomes over the next five years, reversing the downward trend in 2018.
Legacy bequests are gifts to charity left in people’s Wills. In 2018 charities reported a 2% drop in this type of income due to the weak performance of the economy and people’s concerns about their financial future.
However, Christ Farmelo, Technical Director at Legacy Foresight, says the January 21, 2020 Brexit deadline and the December 12 General Election announcement have had a positive effect on people’s plans to leave money in their wills.
He said: “More than 85% of the £3.1 billion of income received by UK charities from gifts in Wills in 2018 was from “residual gifts” – a share of an individuals’ estate when they die.
“The value of these gifts is directly dependent on the value of assets that people typically own such as houses, stocks and shares and other financial investments.
“The recent weak performance of the economy has had an impact on the value of these key assets. For example, house prices in the South East were 2% lower in July 2019 than they were in July 2018.
“However, it is expected that if a deal can be agreed in parliament on the shape of the UK’s future relationship with the EU then the value of gifts left to charities in individuals’ Wills will be boosted by the expected strengthening of housing and financial markets as a result of the resolution of Brexit uncertainty.”
The organisation’s analysis revealed that charity bequests in Wills are expected to grow from £3.2 billion in 2019 to £3.8 billion in 2024, averaging 3.3% per year over the next five years.
Mr Farmelo added: “We should highlight that, although latest developments are in line with our core scenarios for legacy income, there still remains significant risks relating to the outcome of the general election, along with global trade tensions and geopolitical pressures.
“In today’s uncertain times, it is vital to continue to monitor developments in the wider economy and consider the impact that they could have on the value of gifts left to charity.”
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