Millionaires will rise globally, but fall in the UK

People walk through a shopping mall in Manhattan in New York City on July 5, 2024.

Spencer Platt | Getty Images News | Getty Images

LONDON — The number of millionaires worldwide is expected to continue to rise over the next five years, with the United Kingdom a clear outlier, according to UBS's Global Wealth Report 2024.

The number of adults owning $1 million or more is expected to grow in 52 of the 56 developed and developing countries surveyed between 2023 and 2028. The growth will be led by tech giant Taiwan, where the number of millionaires is expected to increase by 47% thanks to a booming microchip industry and increased immigration of wealthy foreigners.

That growth was followed by Turkey (43%), Kazakhstan (37%), Indonesia (32%) and Japan (28%). The two hubs where most global millionaires are located, the US and mainland China, will see their numbers rise by 16% and 8% respectively.

However, the number of millionaires in the UK is predicted to fall by 17%

Paul Donovan, chief economist at UBS Global Wealth Management, said the UK currently has the third-highest number of dollar millionaires in the world, which he called “far more… than the economy deserves.”

He added that countries such as France and Italy, where the number of millionaires is expected to rise by 16% and 9% respectively, are experiencing more “natural” growth, while any growth in the UK would be offset by capital outflows due to various “push and pull” factors.

That's partly due to natural shifts in the distribution of wealth as the global economy undergoes structural changes and capital moves around the world, he said at a news conference.

Other factors driving the decline in the number of millionaires include the UK's imposition of sanctions against Russia – wealthy Russians have long used London as a home base for their assets – and the “non-native millionaire population” that is constantly seeking low-tax locations such as Dubai and Singapore, Donovan added.

He did not mention the UK's newly elected centre-left Labour Party as a contributing factor to the forecast. Instead, he noted that changes to the UK's so-called “non-domiciled status” tax regime, kicked off by the recently ousted Conservative government, had had a “small, non-substantial” impact.

Another country where the number of dollar millionaires is expected to decline is the Netherlands. The number of wealthy individuals there is expected to fall by 4%.

Meanwhile, the report sees the number of US dollar millionaires in Russia growing by 21%. Donovan said this was partly due to currency fluctuations, as well as recent trends in the commodities and energy markets that have benefited some business owners.

Rising inequality?

UBS found that global wealth growth rebounded in 2023, posting growth of 4.2% after a 3% decline in 2022. The recovery was led by the EMEA region (Europe, the Middle East and Africa), which grew 4.8%, compared to 4.4% in Asia-Pacific and 3.5% in the Americas.

The report, meanwhile, presents a mixed picture of the evolution of wealth inequality. Between 2000 and 2030, UBS said wealth mobility — the ability of an individual to move up a wealth class over their lifetime — would generally improve.

The report found that people who start in the lowest asset class have a 60% chance of moving up at least one asset class, and a 1 in 3 chance of moving up two or more asset classes.

However, the growing clusters of high wealth at the top of large economies are increasingly distorting average wealth figures.

Wealth Tax and the Next Great Migration

“Some of these findings about individual wealth will come as no surprise to most readers, but others may be very unexpected. Many people may not recognize their own country. They may feel that reported wealth growth or decline has passed them by without them noticing,” UBS said in the report.

This is because in many countries, an increase in average wealth overlooks a sharp decline in median wealth, meaning greater inequality and greater concentration of wealth among the richest people.

The countries where average wealth is most out of balance with median wealth are France and Mexico, where it is a factor of two higher. In China, Hong Kong and Taiwan it is almost three times higher, and in the US, Brazil and the United Arab Emirates it is a factor of five higher.

Horizontal power transfer

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