A survey by wealth manager Rathbones found that just 31 per cent of those who wrote wills this year intend to leave money to charity, down from 46 per cent in 2024. Of those planning a charitable gift, 13 per cent said they would leave £50,000 or more. Last year, UK charities received around £4.5 billion in bequests. If estate values remain unchanged, the decline in charitable intentions represents a significant shortfall for the sector.
Donations in wills can also provide tax advantages. Estates leaving more than 10 per cent to charity see the inheritance tax rate on the remainder reduced from 40 per cent to 36 per cent. But increasing numbers of families are facing higher inheritance tax bills due to frozen thresholds and upcoming policy changes. From April 2027, private pensions will fall within the inheritance tax net.
Farmers and small business owners will also be affected, as the current 100 per cent exemption for agricultural and business property relief will be capped at £1 million. Assets above this threshold will qualify for only 50 per cent relief, resulting in a 20 per cent inheritance tax rate rather than 40 per cent.
The inheritance tax-free allowance remains frozen at £325,000, unchanged since 2009 with an additional £175,000 allowance available for leaving a main home to direct descendants. Assets passed to a spouse or civil partner remain exempt. HM Revenue & Customs reports that inheritance tax receipts rose to £5.2 billion between April and October, an increase of £200 million from the previous year.
Andy Pitt, head of charities at Rathbones, said: “The generosity of the British public is resilient and a vital force for good. Legacy giving offers hope for the future, but there needs to be increased awareness of its benefits, improved guidance, and a reassessment of any related complexity or red tape.”
