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Statutory Legacy Sum increased

Author: Professional Standards Department

Published: 10 Aug 2023

Due to recent high inflation, the Government has updated the Statutory Legacy (fixed net sum) to £322,000. This change took effect via a Statutory Instrument on 26 July 2023. Find out more including the reason for the change.

The Statutory Legacy is the sum to which the surviving spouse or civil partner of a person who dies intestate but with children is entitled to first from the estate before the remainder is shared. The previous figure was £270,000.

The applicable legislation, the Administration of Estates Act 1925 (the Act), was amended in 2014 to implement most of the reforms recommended in a 2011 Law Commission report, Intestacy and family provision claims on death. It sought to modernise and simplify the law to create a fairer and more comprehensible set of rules. Schedule 1A to the Act resulted and sets out the requirements for changes to the sum.

Schedule 1A requirements mean the next review of the sum would normally be due every five years. The previous Statutory Legacy sum was set in January 2020 and therefore the next review was due by January 2025.

However, the legislation also provides that if the inflation rate increases by 15% or more from the base rate applicable to when the statutory legacy was previously set, then the Government must review the sum. It must also take steps to either make a negative statutory instrument to increase it according to the change in the consumer prices index (CPI) or seek to set a different sum, calculated by an alternative approach, by laying a draft instrument before Parliament for affirmative resolution.

This trigger point was reached in December 2022 when the Consumer Price Index (CPI) for November 2022 was published showing an increase of 15.023% over the CPI used to set the last fixed net sum, which was that for November 2019 (‘the base month’).

Although the CPI inflation figure for January 2023 showed a fall in inflation, it rose above it again in the February figure. The Government has decided that the most appropriate approach is to expedite the matter and provide certainty for families affected. It has therefore set a new rate linked to the latest inflation rate represented by the change in the CPI.

In accordance with the methodology set out in paragraph 7 of Schedule 1A to the Act, the Ministry of Justice calculated the change in the CPI from that in the ‘base month’ to that in the ‘current month’ (ie, June 2023, the most recent month available) and applied that to the last sum to identify the increase. In addition, in accordance with the Act, that figure must be rounded up to the nearest multiple of £1,000. Therefore, as the increase was 19% over the specified period, after rounding up, the increase on the existing sum is £52,000. Accordingly, the Lord Chancellor has set the new sum as £322,000.