From the British Legion website, it appears that the practice of wearing family members medals in the UK is "officially incorrect" yet a common, unpunished act.
http://www.britishlegion.org.uk/remembrance/medals/medal-faqs#wearing
Can I wear medals belonging to members of my family?
The official position regarding wearing medals other than your own is that they should not be worn. However, it was generally accepted from soon after the Great War that widows of the fallen wore their late husband's medals on the right breast on suitable occasions.
More recently it seems to have become the custom for any family member to wear medals of deceased relations in this way, sometimes trying to give a complete family military history by wearing several groups. Although understandable it is officially incorrect, and when several groups are worn it does little for the dignity of the original owners.
The Legion takes a pragmatic view and our Ceremonial Rules state:
The official rules for wearing medals allow only official awards to be worn. Unofficial purchased medals and foreign medals which do not have the Sovereign's permission to be worn are not allowed. Standard Bearers, Parade Marshals and other officials on Legion duty are bound by this ruling and unofficial medals must not be worn when on Legion duty.The medals awarded to a deceased Service / ex-Service person may be worn on the right breast by a near relative (mother, father, sister, brother, wife, husband, daughter and son). Not more than one group should be worn by any individual.
One thing is certain, no action will be taken officially if anyone wears a relation's medals. In the Legion this practice is banned for Standard Bearers and parade officials and as stated above for other members.
Another option is to have the family medals framed so that they can be displayed the whole year round. These displays can include a photo, cap badge and name plate which makes it a very personal display for a family. If you are interested, the following companies offer this service: