Britain's average wealth saw the second-largest decline among major economies in 2024, as highlighted by a prominent global study, intensifying concerns over the nation's struggle to prevent the departure of its wealthiest citizens and revitalise its sluggish economy.
The UBS annual Wealth Report revealed that mean household wealth in Britain dropped by 3.6 per cent throughout the previous year, halting a period of robust growth which had seen an increase of more than six per cent since the decade's commencement, as reported by .
Turkey was the only nation to surpass the º£½ÇÊÓƵ in terms of the reduction in household wealth, with the country facing a severe economic crisis that led to inflation exceeding 75 per cent and interest rates soaring to a staggering 50 per cent in 2024. The report noted that average wealth in Turkey plummeted by over 14 per cent in real terms.
Michel Frey, who leads the º£½ÇÊÓƵ high net worth (HNW) team at UBS's wealth management division, attributed the decline in the º£½ÇÊÓƵ's wealth to the lacklustre performance of the London stock market coupled with modest increases in property values.
"Average real-term wealth per adult in the United Kingdom fell in 2024 because living-cost pressures and rising interest rates moved faster than either house prices or most financial markets. Naturally, this dented people's ability to build or retain wealth," he explained to City AM.
Despite this, median household assets in the º£½ÇÊÓƵ did experience growth of over five per cent, indicating that it was primarily the upper echelon of the º£½ÇÊÓƵ's wealth spectrum that experienced significant reductions in their net worth, Frey further noted.
American wealth grows faster than other countries
The latest report has uncovered that wealth in the United States expanded more rapidly than in other nations, with American households witnessing an 11 per cent increase in asset value across the Americas. This compares with a global growth rate of 4.6 per cent.
This surge underpinned the position of the US as the globe's wealthiest nation, accruing over 1,000 new millionaires daily throughout a year which saw the S&P 500 index soar by more than 25 per cent and its national economy expand by 2.8 per cent. This was in contrast to the economic stagnation experienced by most other advanced economies.
Frey pointed out the stark contrast between the performance of US blue-chip stocks and London's FTSE 100 as a critical factor contributing to the wealth disparity between the two nations, commenting that "muted gains" in the London market have impinged on º£½ÇÊÓƵ household wealth.
In 2023, the FTSE 100 showed modest growth at 5.7 per cent, markedly lower than the achievements of its New York counterpart, while the º£½ÇÊÓƵ property market witnessed a 4.7 per cent increase.
"Where the º£½ÇÊÓƵ does lag is in the breadth of its public equity market and the depth of domestic risk-capital formation," he asserted. Frey suggested that invigorating the London Stock Exchange and motivating more up-and-coming companies to seek listings locally would significantly bolster future wealth creation within Britain.
The UBS analysis reflects concurrent research into the diminution of wealth within the º£½ÇÊÓƵ, coinciding with the relocation of some of its wealthiest individuals to jurisdictions offering reduced tax liabilities.
A study by Henley and Partners in December estimated that 10,800 dollar millionaires had departed the º£½ÇÊÓƵ in 2024, a trend accelerated by the government's decision to abolish the non-dom status and implement other tax increases in its Autumn Budget.
