SMEE & FORD REPORTS A RECORD-BREAKING YEAR FOR CHARITY LEGACY INCOME

[THE LATEST Legacy Trends Report from Smee & Ford reveals that 2022 was a recordbreaking year for legacy income to charities in England and Wales. The legacy tracker identified 37,053 charitable estates out of a total of 269,699 estates processed in 2022 that included a will: meaning around 14% of probated estates with wills are charitable.

Organisations reporting legacy income to the Charity Commission, covering all financial year-ends between July 2021 and June 2022, increased to £3.3bn – a 13.2% increase on the previous year’s total of £2.9bn. Those organisations represent the largest legacy recipients in the country and recieve at least £500,000 in total annual income.

For charities who do not report legacy income with the Charity Commission –those with a total income of less than £500,000 – Smee & Ford’s calculations show that legacy income was worth £447m in 2022. That is significantly higher than in previous years, showing that more legacy income is being distributed to charities with lower total annual income.

Combining the figures, Smee & Ford estimate that total legacy income to charities increased to around £3.7bn in 2022. That is positive news for the charity sector, being the largest total they have ever recorded.

Understanding the value of estates

The value of charitable estates also saw a significant increase: from £19.9bn in 2021 to £21.3bn in 2022 – a 7% growth and the first time values have exceeded £20bn. Estate value growth is important to legacies, Smee & Ford explain, because growth in estate values translates to growth in the values of residual bequests. In recent years, they have seen growth in the average value of charitable estates, from £496,000 in 2017 to £576,000 in 2022. Over the past year the average value of a charitable estate has increased by 8%.

As the report explains: “For most people, the most valuable asset when they die is the home they live in, which is why house prices are so important to the value of many legacy bequests. An examination of the House Price Index reveals that the average house price in November 2022 was £295,000, which is £28,000 higher than this time the previous year. This should have positive implications for residual bequests.”

Polly Avgherinos, managing director of Smee & Ford, commented: “It is encouraging to see total legacy income for charities reach a record high in 2022, as well as a new milestone reached for the value of charitable estates. We hope that legacies will remain resilient in the face of the current economic climate, and remain committed to supporting the sector with valuable market insight throughout this year and beyond.”

Other key findings in the Legacy Trends Report include:

• In 2022 there were 10,627 unique

• charitable organisations mentioned in

• wills: the second highest Smee & Ford

• have recorded over the past decade.

• 37.1% of charitable wills contained just

• one named charity and 21.7%

• contained two charities. The highest

• number of charities named in one will in

• 2022 was 79.

• There were 37,053 charitable estates in

• 2022, nearly the same number as

• reported the previous year.

Regional variations

The report also identified regional variations in the amount of giving in wills.

• Areas with the highest concentrations of

• charitable wills in 2022 include

• Brighton, Birmingham, Portsmouth,

• Bournemouth and Bristol; all having

• over 760 charitable estates.

• Areas with the lowest concentrations

• of charitable estates in 2022 include

• Llandrindod Wells, Halifax, Sunderland,

• Southall and Ilford; all having less than

• 120 charitable estates.

• Areas which have seen the most annual

• gains in charitable estates were Bristol,

• Leeds and Peterborough.

• Areas which saw the largest annual

• declines in charitable estates were

• Kingston upon Thames, Brighton and

• St Albans. q