Wealthy parents are increasingly donating more to charity amid a rising inheritance tax (IHT) burden and concerns about the impact of leaving too much money to their children, a new study from Rathbones shows.
A targeted study of high-net-worth parents with average wealth of more than £3 million in total assets found three out of four (75%) believe that leaving too big an inheritance can be a curse on their children’s lives and are considering ways to avoid the problem.
Over three fifths (61%) are concerned that any money left to children will be used irresponsibly. Inheritance worries are not just about the curse of being left too much money – nearly six out of 10 parents (57%) say their adult children already have enough money and there are more important uses for their assets.
Meanwhile, more than half (53%) of parents have increased their charitable donations over the past two years. A surge in income and a desire to contribute to making the world a better place were cited as the top two motivating factors behind their generosity.
With nil-rate bands frozen and pensions set to be included in estates from April 2027, more families face rising IHT bills. Charitable donations can ease this burden, as gifts to charity are IHT-free and leaving 10% of your estate to charity cuts the IHT rate from 40% to 36%.
For donations made during one’s lifetime, Gift Aid also boosts the value of donations by 25%, while higher-rate taxpayers can reclaim additional tax relief through their self-assessment.
Gemma Gooch, Head of Charities Distribution at Rathbones, says: “Our analysis shows many wealthy parents, already concerned about inheritance tax, fear the impact of too big an inheritance on their children’s aspirations and drive. It is therefore no surprise that more are increasingly turning their attention to charitable giving. Incorporating charitable giving into financial planning allows parents to create a meaningful legacy, support causes close to their heart and potentially pass on a greater share of their estate to their chosen beneficiaries, rather than the taxman.”
Other notable findings from the targeted study include:
• The top concern among wealthy parents about large inheritances is that the money will be poorly invested, ahead of fears over family disputes or irresponsible spending.
• Nearly two-thirds (65%) say they would make inheritance access conditional on achievements, such as qualifications.
• Over one in eight (13%) plan to leave money directly to grandchildren, with another 26% considering it.
• More than half (52%) of those skipping a generation cite concerns their children would misuse the funds, while 41% are motivated by tax efficiency. A quarter (26%) worry about divorce risks, and 13% admit strained relationships with their adult children.
Olly Cheng, Financial Planning Director at Rathbones says: “We’re seeing more clients aiming to strike a balance between reducing their IHT burden, supporting good causes, and leaving an inheritance that doesn’t dampen their children’s ambition. For those concerned about the latter, contributing up to £2,880 a year into a child’s pension - topped up to £3,600 with tax relief - could be a good option. The funds remain locked until retirement (age 55, rising to 57 from 2028), allowing decades of tax-free growth.
“For those wanting more control over how and when wealth is passed on, a trust could be worth considering. Trusts can stagger access to funds, reducing the risks of sudden wealth undermining ambition. While more about control than tax efficiency, they remain a valuable option — especially for blended families. Professional advice is essential to find the right solution. Rathbones commissioned independent research agency PureProfile to interview 94 high net worth parents with estates valued at more than £1 million during July 2025. The average value of estates owned by respondents was £3.075 million.
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