The growth of charity legacy income has slowed over the past year, reaching a total of £4.1bn in 2023/24, new research shows.

Analysis by the Legacy Futures consultancy has found that the total income from legacies grew by just over 1 per cent in the past year, falling below long-term growth trends.

Between 2021/22 and 2022/23, legacy income grew by nearly 8 per cent, rising from £3.8bn to £4.1bn. In the year before that growth was even higher, rising by about 12 per cent between 2020/21 and 21/22.

Legacy Futures’ annual benchmarking research tracks the legacy market through a consortium of more than 80 charities that account for about 50 per cent of the legacy market.

The research found that a lower-than-expected death rate of 643,400 in 2023/24 had led to a reduction in bequest numbers, which was down by nearly 1 per cent on the previous year. 

It also found that the average legacy value in 2023/24 was about £28,900, an increase of 0.4 per cent on the previous year. 

This year’s average was also significantly below the long-term annual average growth of about 3 per cent since recording began in 1994. 

Legacy Futures said house prices had been a contributing factor to this subdued growth.

The research also highlighted challenges relating to probate delays, saying that in August last year the backlog at His Majesty’s Courts & Tribunals Service peaked at nearly 70,000 bequests, equivalent to about £900m. 

This represents about a quarter of a year’s legacy income for the market, Legacy Futures said.

This backlog has since decreased to about 33,000 cases, the consultancy added.

Legacy Futures predicted that substantial legacy growth was expected to resume around 2027/28.

But when adjusted for inflation, the actual spending capacity from legacy funds is projected to decrease by more than 6 per cent between 2023/24 and 2026/27, which Legacy Futures said would put additional pressure on charities to optimise their resources.

Despite the restrained short-term growth, Legacy Futures said that as the baby boomer generation approached legacy-giving age, the future of legacy giving was “increasingly promising”.

By 2050, legacy income from UK charities is expected to exceed £10bn annually, which Legacy Futures said marked a “historic intergenerational wealth transfer that could boost the legacy giving market and create a secure and solid income stream”.

Ashley Rowthorn, chief executive of Legacy Futures, said: “The long-term outlook for legacy income is brighter than it has ever been, yet short-term challenges persist. 

“While legacy income remains stable, inflation is impacting charities' purchasing power, tightening budgets and cash flow. Charities must stay informed of the external drivers of legacy income to understand market influences on their performance and to plan effectively.”

Lucinda Frostick, director of Remember a Charity, said: “Legacies are an increasingly vital income stream for a growing number of charities, strengthening resilience and sustaining charitable work through challenging economic times. 

“As we look to the future and consider the anticipated growth of the legacy market, it shows how crucial legacy fundraising will be to ensure a thriving charity sector and charitable services for years to come.”