6 minute read
The billionaire hedge-funder Sir Chris Hohn has donated a record £1.4 billion in a year, according to the Sunday Times Giving List 2026. The ranking also found that the top 100 donors collectively gave £4.976 billion to charity personally, or through their charitable foundations and businesses, up by £1.245 billion compared with 2025.
But charitable giving is no longer something reserved for billionaires. It is becoming an increasingly important part of how many families think about legacy, values, and the long-term purpose of their wealth.
Nearly eight in 10 pre-retirees and retirees (age 50-80 years) say charitable giving plays an important role in their lives, according to research from Fidelity Charitable, highlighting how philanthropy is becoming more closely linked to retirement, values, and long-term financial planning.
If charitable giving is something you may want to include as part of your own plans, starting those conversations earlier could give you more flexibility over how your wealth is ultimately used and shared.
How charitable giving may reduce inheritance tax
Inheritance tax is becoming a growing consideration for more families. According to HM Revenue and Customs, inheritance tax receipts reached a record £8.25 billion in the 2024/25 tax year as rising property prices and frozen tax thresholds pulled more estates into scope. Planned government reforms, such as the pension inclusion from April 2027, could also bring more families into inheritance tax conversations over the coming years.
This is just one reason that charitable giving is increasingly being discussed alongside wider retirement and estate planning decisions.
Gifts left to UK-registered qualifying charities are generally exempt from inheritance tax, according to the UK Government guidance on charitable gifts in wills. In some cases, charitable giving may also reduce the inheritance tax rate applied to the rest of your estate.
If you leave at least 10% of your net estate to qualifying UK-registered charities, the inheritance tax rate on the remainder of your estate could fall from 40% to 36%, according to current UK rules. The calculation of what constitutes 10% of your net estate can be complex, and the rules are specific, so this is an area where taking regulated financial and legal advice is recommended before building it into your estate plans. For some people, that may create an opportunity to support causes they care about while also thinking carefully about how wealth is eventually passed on to family.
But charitable giving is rarely just about tax. You may want to support a local hospice that helped your family, a medical charity linked to a personal experience, or educational causes that reflect your own background and values. In many cases, the emotional connection to giving is just as important as the financial planning side.
“Charitable giving can allow families to support causes that matter deeply to them while also helping to reduce potential inheritance tax liabilities in certain circumstances,” says George Agan, independent financial planner at Flying Colours. “When planned carefully, it can create benefits both for the charities receiving support and for the wider family legacy left behind.”
Some people also choose to give during their lifetime rather than waiting until later. That can allow you to see the impact your support is making while gradually shaping how wealth is distributed over time.
Why planning early could give you more flexibility and control
Estate planning is often something people postpone. Research from the National Wills Register found that more than half of UK adults have not discussed what should happen to their estate with anyone.
But as you move closer to retirement, those conversations can start to feel more relevant and more immediate. You may begin thinking not only about your own lifestyle and retirement income, but also about helping children financially, supporting grandchildren, or deciding what you ultimately want your wealth to achieve.
Planning earlier may give you more time to:
- Structure retirement income efficiently
- Make use of gifting allowances over time
- Review pensions and beneficiary arrangements
- Decide when and how to support family members
- Build charitable giving gradually into your long-term plans
“Once clients feel financially secure themselves, the conversation often shifts towards what they want their wealth to achieve beyond their own lifetime,” says George. “For many people, that includes balancing support for family with charitable giving in a way that feels meaningful and manageable over the long term.”
How an adviser could help balance lifestyle, family support, and giving
Retirement today often involves more financial decisions than previous generations had to navigate. According to the Office for National Statistics, intergenerational wealth transfers are expected to rise significantly over the coming decades as property and pension wealth grows.
For you, that may mean balancing several priorities at the same time. You may want to enjoy retirement while you are healthy and active, think about future care costs, support family members, or include charitable giving within your long-term plans.
The challenge is often not deciding what matters most. It is understanding how those decisions may affect your financial security over time. For example, gifting too much too early could reduce your future flexibility later in retirement, while delaying decisions for too long may limit the options available to you.
If you would like to explore how charitable giving could fit into your wider retirement and legacy plans, speaking to one of our independent advisers could help you better understand the options available to you. You can arrange a free, no obligation meeting at a time to suit you here: https://fcadvice.co.uk/book-an-appointment/
Please note:
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
The Financial Conduct Authority does not regulate estate planning, tax planning, trusts, or Will writing.