With polls opening in less than 24 hours, Wealth Club, an investment platform for wealthy and sophisticated investors, has revealed its inaugural UK Wealth Report.
The study highlights the current sentiments of UK HNWIs regarding wealth creation, tax policies and the attractiveness of the UK as a business hub.
Nicholas Haight, investment director at Wealth Club, highlighted the stark findings: “The UK has an image problem. Wealthy investors view the country as an unattractive place to start a business, citing an unsupportive culture for wealth creators and high taxes. These individuals are vital to the UK economy. The top 100 earners contribute an average of £46m in tax each, while the top 100,000 earners cover a quarter of total income tax and capital gains tax, despite representing just 0.3% of UK taxpayers. This data, obtained through a Freedom of Information request to HMRC in November 2023, underlines the importance of changing this group’s perception of the UK.”
The report reveals significant discontent among high-net-worth individuals:
Build wealth55% feel the UK does not support wealth creation or creative people. 42% consider the UK an unattractive place to set up a business, and 31% are more likely to leave the UK for financial reasons than 12 months ago.
Economic Forecast81% believe the UK is in a worse economic state than it was five years ago, with just 12% seeing an improvement. Looking ahead, 45% expect moderate or strong economic growth, while 11% expect a decline. In addition, 78% expect interest rates to fall next year, with 19% expecting them to stay the same.
Tax collection:60% expect tax increases regardless of the election result, and 37% only expect tax increases if Labour wins. 83% of respondents expect their personal tax burden to increase in the next 12 months. Meanwhile, 24% feel poorer than they did a year ago, and 27% feel richer. The current tax rate is considered too high by 71%, just right by 22%, and too low by 7%. If given the opportunity, 42% would cut inheritance tax.
investment sentimentOnly 32% see the UK as an attractive investment destination, despite 39% believing the UK stock market will rise next year. 47% of HNWIs see the US stock market as the most attractive, followed by small-cap UK companies (41%), while only 25% see large UK listed companies as attractive to invest in.
As Labour, which is expected to win this election, promotes itself as a champion of growth and wealth creation, it faces the challenge of improving the UK’s attractiveness to investors and business people. The next edition of the UK Wealth Report, due out at the end of the year, will reveal whether the new government has succeeded in boosting the UK’s business credentials.