Statutory interest on legacies: what should you do?

Statutory interest on pecuniary legacies paid after the executor's year can often be forgotten by personal representatives when administering an estate. This interest can be a valuable income source for charities, depending on the size of the legacy.

In this article, we outline some top tips on how you can request statutory interest, and some circumstances under which it might not be appropriate to ask for the interest to be paid. We have also asked Adrian Bond, Senior Legacy Officer at Blue Cross for his comments based on his extensive experience in the legacy sector.

Why ask for statutory interest?

Legacy officers should consider requesting statutory interest to maximise the gifts that their charities receive from estates.

Take, for example, a £50,000 legacy paid on 15 May 2025, after the executor's year expired on 1 January 2025.  The statutory interest payable in respect of this legacy would amount to £640.11.  A charity in receipt of multiple such legacies could therefore benefit from substantial additional income.

Adrian states:

"The landscape has changed following multiple consecutive rate rises, even though they’ve cooled slightly from the peak, meaning that it is now potentially more “worth the ask” in the right circumstances, in the event the executor/solicitor has not considered it after paying the legacy.

It's most certainly a judgement call (and sometimes a fine one at that) for a Legacy Officer as to whether to “make the ask” for statutory interest or not.   Where executors/solicitors do identify that statutory interest is payable and pay a sum of interest, with so many rate changes having taken place it’s always worth checking how the amount has been arrived at – there’s a really useful calculator (kindly prepared by Kate Davies at Cats Protection, if I’m right) in the Further Reading and Useful Links Section of the Member’s Area of the ILM website to assist with that."

How and when to ask for statutory interest

Here are some top tips on how to ask for statutory interest:

• Make a note of the date of the expiry of the executor's year on your file and, when requesting an update from the personal representative before this date, gently remind them that statutory interest will shortly be payable on your legacy.

• Highlight that the statutory interest is paid from the residuary estate and the longer the legacy/legacies are not paid, the residuary estate will reduce.

• If your legacy has been paid without the interest due, send a gentle reminder with your receipt acknowledging the legacy payment and asking for the interest payment to be processed.

• In some circumstances, it might be appropriate to state that you will waive your charity's statutory interest if payment of the legacy is actioned promptly. This can often ensure payments are made swiftly and your charity receives its much-needed income.

When you might not ask for statutory interest

It can often be difficult to ask for statutory interest especially if a personal representative has already paid the legacy.  There are some occasions when you may not ask for the statutory interest, for example:

• If the statutory interest payable is small (for example, under £50).

• There is a lay executor administering the estate without legal advice and there could be possible reputational risks to consider.

• You are not receiving responses to correspondence requesting the interest to be paid and it would not be cost effective to keep chasing bearing in mind the amounts involved.
  
• The deceased was a long-term supporter, and the family have a lovely affiliation with your charity which would only be tarnished if they are asked for statutory interest.

• Your charity is also the sole residuary beneficiary of the estate.
  
• Adrian also highlights that if, for example, the residuary beneficiaries of the estate are close loved ones of the deceased, and if they found out that your charity asked for statutory interest to be calculated over and above what the will stated you should receive, there could be possible reputational issues.
  
• In addition, if a solicitor is administering the estate, there will be cost implications of them calculating the statutory interest due, as there have been various different interest rates changes which again may cause a possible reputational issue.

Need help?

If you would like further information relating to statutory interest on legacies please see our previous article here: A guide to pecuniary legacies and statutory interest or contact Sophie Gilford in the Charity Probate team.