PROBATE delays are forcing greater than half of the UK’s charities to in the reduction of on essential services, a latest survey suggests.
The study of 101 charity chief executives was conducted by Rathbones, which is chargeable for £9.4 billion in funds under management for greater than 3000 charities.
Almost all participants within the study (99 per cent) reported that they were currently affected by hold-ups in obtaining probate — the legal right to take care of someone’s property, money, and possessions once they die.
A severe backlog of probate applications, which pre-dates the Covid pandemic, has meant that the common waiting time greater than doubled between April 2022 to April 2023. Applicants have waited greater than 11 months for probate to be granted.
Gifts in wills currently raise about £4 billion annually for UK charities. The Rathbones study finds that a couple of in eight (13 per cent) of the executives surveyed said that their charity had been “very badly affected” by the delays in probate.
About 80 per cent said that their charity’s recruitment programme had been adversely affected. More than half (51 per cent) said that delays had forced cutbacks on the vital services provided by the charity. Just under half (43 per cent) had needed to dump assets, akin to property, to fill the financial gap; a couple of quarter (27 per cent) had needed to make redundancies.
The study also found that, on average, 14 per cent of every charity’s annual income was currently being held up by probate; but 42 per cent of charities reported that this figure represented between 15 and 30 per cent of their income.
Most executives questioned expected the logjam in probate processing to ease in the longer term. Half (50 per cent) believed that these delays would improve over the subsequent two years.
The head of charities at Rathbones, Andy Pitt, said: “Significant delays with probate are causing charities to miss out on hundreds of thousands of kilos of income. . . The logjam will not be only adding to the financial stress of grieving families, with property sales falling through or having to pay interest payments on inheritance tax — but can be leading to many senior charity executives having to make difficult decisions on how one can deal with hindered money flow . . . and it’s not possible to budget or plan.”
