Cash gifts

Part of the Life Well Spent Report 2025

Can giving loved ones big financial gifts in later life make us happier?

A quarter have given a significant cash gift

Over 1 in 5 (22%) people over 50 have given substantial cash gifts to loved ones in the last five years. That’s down 3% since 2024.

But this number rises to 27% (-1% since 2024) for the happiest people, and 32% for the over 70s (-4%).

The average amount gifted is £12,323, which is £7,698 less than in 2024, but £1,966 less than in 2022. And the most common reason for gifting the money is as a special birthday or Christmas present.

Reasons for giving a cash gift

Most cash gifts are given to our children

79% of gifters give significant cash sums to their children – down 4% since 2024. While 16% (-6%) give a significant sum to their grandchildren, and 20% (+3%) to someone else. When we look across all age brackets over 50, the over 70s are most likely to leave a sizable cash gift to their grandchildren (28%).

Of all the gifts that are given for a house deposit, 89% (-2%) go to children. Of those that are given to help with home renovations, 82% ( -2%) go to children. And for wedding funds, 79% go to children.

Of the gifts that are given for college/tuition funds, 30% go to grandchildren. To help following the birth of a baby, 28% go to grandchildren. And for special birthday/Christmas gifts, 20% go to their grandchildren.

Who we're gifting cash to

The biggest cash gifts are for house deposits

Once again, the biggest cash gifts given to loved ones are for house deposits. The average amount gifted for this reason by all people over 50 is £30,634. That’s £1,601 more than in 2024, and £3,954 more than in 2022. And this amount rises to £40,285 for 60 to 69-year-olds (up £5,464 since 2024).

18% of those who’ve gifted cash did so to put towards a house deposit – down 8% since our first report in 2022.

The next largest gifts are for help with home renovations, with an average of £8,932 – up £499 since last year. This is followed by an average of £6,722 to help to start a business (+£206).

32% (+9%) of those giving cash gifts are doing so to help loved ones with living costs, with an average gift amount of £1,943 – down £482 since 2024.

Average amount of cash gifted

Giving cash gifts to loved ones makes us happier

Almost 78% (up 1% since 2024) of people who give cash gifts to loved ones say doing so made them happier.

Gifting cash to help with fertility treatment seems to make gifters happiest, with 100% saying it increased their happiness. But it’s worth noting that this has a very low base size, with few gifting for this reason.

If we look at more common reasons for gifting cash, the one that makes gifters happiest is to help out following the arrival of a baby. Over 9 in 10 say this increased their happiness. This is followed by gifting for a special birthday or Christmas present (84%) and for a house deposit (also 84%).

Gifting money to help cover medical expenses is the most likely to reduce happiness or have no impact on it. But over half (53%) still feel happy to have helped in this way.

How spending on cash gifts improves happiness

Most of us would like to leave an inheritance

There's a growing trend towards wanting to leave an inheritance when we're gone, with 46% saying they'd like to leave some money behind - up 7% since 2022. Supporting this, fewer would prefer to keep the money to spend on their retirement, even if it means nothing for their family (19% - down 8% since 2022, and down 12% since last year's report).

However, 10% (-2%) would consider cutting back on spending in retirement to ensure they can leave an inheritance. And 18% (-3%) want to give an early inheritance, so they can see their loved ones enjoy the cash.

Almost 1 in 5 (19%) people say they can't afford to leave their loved ones any inheritance, even if they wanted to.

For some, equity release could be a way to offer early inheritance when loved ones really need it without having to cut back on retirement spending.

Attitudes towards inheritance