Let’s start with the correct product names.

• Play:5 (Gen1)
• Play:5 (Gen2)
• Five

There is no sound difference between the Play:5 (Gen2) and the Five. Both are a sound improvement over the Play:5 (Gen1)

The Five also has faster processor, more memory and a better wireless radio.

The Play:5 (Gen1) is S1 only. The Five is S2 only. The Play:5 (Gen2) can be used on either system.

Are you saying there are three versions of the Five.?  Play 5 Generation 1, Five and Play 5 Generation 2?  I thought there were only two versions?  I have Play 5 Generation 1 so if I have understood you correctly there would be a significant improvement if I upgraded.  Do you know if my Play Fives Generation 1 would work independently as a stand alone speaker?

There are 3 versions.  Play:5 Gen 2 and Five (3rd generation of the speaker, but not referred that way by Sonos) are improvements over the Play:5 Gen 1.  The Play:5 Gen 1 can be used on it’s own.

Note that the Five is the only one you can purchase new anymore.  If you were to purchase a Play:5 Gen 2. it would be from a used market.  Obviously, your results may vary.

As @Mr. T suggested, there is one version of the Five, and two versions of the PLAY:5. 

The Play 5 Gen 1 would work as a stand-alone speaker as mentioned above, BUT only using the S1 controller. Your other Sonos would use the S2 controller.

@Devonian .  Given your continuing confusion over the names and generations of these speakers, are you sure that what you have is a Play:5 gen 1?  Does your speaker have touch controls that you tap or physical buttons that you press?  Does it have a line-in socket AND a headphone socket or just a line-in socket?

Yes, they have all these features, definitely Play 5:Gen 1s

It depends what you mean by 'these features'. My post didn't say which features belonged to which speaker.  But perhaps ypu can tell from @jgatie 's images. 

I should have said that the features are exactly as shown in @jgatie’s image.  So in short is it worth me spending about £750 upgrading these old speakers to Fives taking advantage of the 30% discount or would I not really notice the difference and if I give the old Play Fives to a grandchild and they have the Sonos 1 app will they be able to use the old speaker with no further Sonos equipment?

Again, there are no PLAY Fives. There are 2 generations of the PLAY:5, and one generation of the Five. 

If you have the PLAY:5 gen 1, then yes, I’d say there’s a significant sound upgrade from the PLAY:5 gen 1 to the Five. And whomever you gift the older PLAY:5 gen 1s would certainly continue to use them on an S1 system. 

Thanks for your helpful advice.

As @Airgetlam says, you would definitely notice a difference.  Or, if you didn’t, you are not fit to own Sonos speakers .

But no need to take our word for it.  Sonos offers no-quibble returns in most if not all of its markets, which means there is no risk in trying for yourself.