17 September 2026
- UK retirees now spend one in every six pounds supporting younger generations.
- Retirees spend £368.7bn a year across the UK economy, with family support among the biggest drivers of spending growth.
- Despite this generosity, 60% are concerned about maintaining their current standard of living over the next year.
- Almost two in five (39%) retirees say the current political environment is affecting their inheritance tax planning, with just 5% of those affected taking no action in response, down from 38% last year.
New research published today in Quilter's second annual Retirement Lifestyle Report reveals UK retirees are increasingly choosing to pass on wealth during their lifetime, with spending on gifts to family and education support now accounting for one in every six pounds retirees spend.
Based on a survey of 5,002 UK retirees, with analysis from the Centre for Economics and Business Research (Cebr), the report reveals the average retiree now gives £2,272 a year to relatives and spends a further £2,250 on education costs for children and grandchildren. Together, this amounts to £4,522 a year. Family support now accounts for 17% of annual retiree spending, making it one of retirees' largest outgoings and pushing it ahead of spending on groceries.
The figures underline the growing financial role retirees are playing in supporting younger generations and demonstrate a clear desire among older generations to provide support during their lifetime and to see the impact it has on the people they care about most.
Policy changes also appear to be influencing behaviour, with 39% of retirees saying the current political environment is affecting their inheritance tax planning. Just 5% of affected retirees say they are taking no action, down from 38% last year. Instead, 33% are looking for more tax-efficient ways to save, 27% are considering moving abroad, 27% are using trusts, 26% are putting assets into relatives’ names and 26% are gifting more to family and friends.
The planned inclusion of unused pension pots within estates for inheritance tax purposes from April 2027 is also prompting many to rethink their retirement strategy. More than a quarter (29%) plan to spend more of their pension savings during their lifetime, 26% intend to gift more of their pension wealth, and 24% expect to access their pension earlier than originally planned.
The research also revealed that 57% of retirees withdrew tax-free cash ahead of the last Budget, including 42% who said they did so in anticipation of rule changes. More than three in five (62%) of those that withdrew tax-free cash regretted doing so.
Retirees continue to make a significant contribution to the wider economy
While family support has become a defining feature of retirement spending, retirees remain a major driver of the wider economy. The average retiree spends £27,159 a year, £5,000 more than last year and equivalent to a total of around £368.7 billion across the UK's retired population. Gifting to family members, supporting education costs, charitable giving, holidays and home improvements account for 94% of this annual uplift.
Holidays remain retirees' largest annual expense at £2,973, followed by home improvements (£2,776). Gifting to relatives (£2,272) and supporting education (£2,250) now rank ahead of groceries (£2,110), illustrating how discretionary spending and intergenerational support are becoming increasingly prominent features of retirement budgets.
Despite this generosity, many retirees remain anxious about their own financial future, with 60% concerned about maintaining their current standard of living over the next year, while average retirement income rose by just 1.2%, well below inflation over the same period.
Steven Levin, CEO of Quilter, said:
"Our research shows retirees are increasingly thinking beyond their own needs and planning for the people who matter most to them. Many retirees are choosing to help children and grandchildren through significant life events, whether that's helping with education, getting onto the property ladder or navigating periods of financial pressure. The scale of that support shows the important role retirees continue to play, not just in their own households, but across the wider economy.
"At the same time, many people are making these decisions against a backdrop of economic uncertainty and significant changes to the retirement landscape, leaving many concerned about their own financial future. The generosity being shown by retirees can have a hugely positive impact on families and the economy, but it also highlights the importance of people having confidence in the decisions they make. Decisions around gifting, drawing on pension savings and passing on wealth can have consequences that last for decades, making it vital that people have the confidence to plan for the long term rather than react to short-term uncertainty.
"To help support better outcomes, policymakers should focus on creating a more stable and predictable framework for retirement planning. Providing greater certainty around pension tax-free cash and the long-term future of pension tax incentives, should be a matter of priority, helping to avoid the unintended but damaging consequences of Budget speculation and policy uncertainty. There is also a need for a sustainable long-term approach to the State Pension provision and for gifting rules to be updated to better reflect modern family life. Alongside greater access to advice and support, these changes would give people the confidence to plan for their own future and support the next generation."
To access the full report, visit: Quilter Retirement Lifestyle Report 2026.
