People walk through the Manhattan Mall on July 5, 2024 in New York City.
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LONDON – The number of millionaires worldwide will continue to grow over the next five years, with the UK being a notable exception, according to UBS’s 2024 Global Wealth Report.
The number of adults with $1 million or more is expected to grow in 52 of the 56 developed and developing economies surveyed between 2023 and 2028. The number of millionaires is expected to increase by 47% from 2028.
This is followed by Turkey (43%), Kazakhstan (37%), Indonesia (32%) and Japan (28%). The United States and mainland China, the two centers with the largest number of millionaires in the world, are expected to grow by 16% and 8% respectively.
However, the number of millionaires in the UK is expected to fall by 17%
Paul Donovan, chief economist at UBS Global Wealth Management, said the UK now has the third-largest number of dollar millionaires in the world, which he called “far more than… we should have as an economy.” .
He added that countries such as France and Italy, where the number of millionaires are expected to rise by 16% and 9% respectively, are experiencing more “natural” growth, while any growth in the UK will be driven by a variety of “reasons”. offset by capital outflows.
This is partly due to natural changes in the distribution of wealth as the global economy undergoes structural changes and capital moves around the world, he told a media briefing.
Other factors contributing to the decline in millionaire numbers include UK sanctions on Russia – wealthy Russians have long targeted London as a location for their assets – and a “non-native millionaire population” continuing to seek out locations with low tax rates, e.g. Dubai and Singapore, Donovan added.
He did not name Britain’s newly elected centre-left Labor Party as a contributing factor to the prediction. Instead, Donovan points out Changes to UK’s so-called non-domiciled status tax regimeReforms initiated by the recently ousted Conservative government have had a “small, rather than substantial” impact.
Another country expected to see a decline in the number of dollar millionaires is the Netherlands, where the number of millionaires is expected to decrease by 4%.
At the same time, the report projects that the number of dollar millionaires in Russia has increased by 21%. Donovan said that’s partly because of currency fluctuations, as well as recent commodity and energy market trends that have favored some business owners.
Rising inequality?
UBS found that after falling by 3% in 2022, global wealth growth rebounded in 2023, growing by 4.2%. 4.4%.
At the same time, the report presents a mixed picture of the growth of wealth inequality. UBS said that between 2000 and 2030, wealth mobility – a person’s ability to move up the wealth ladder during a lifetime – will improve overall.
The report found that people who start in the lowest wealth bracket have a 60% chance of moving up to at least one wealth bracket, and a one-third chance of moving up to two or more wealth brackets.
However, growing high-wealth clusters at the top of major economies are increasingly distorting average wealth data.
“Some of these findings about personal wealth will not be surprising to most readers, but others may be quite unexpected. Many people may not recognize their own country. They may feel that reported increases in wealth or The descent had passed them without them realizing it.
That’s because in many countries, growth in average wealth ignores sharp declines in median wealth – meaning rising inequality and greater concentration of wealth in the hands of the richest.
Countries where average wealth is least consistent with median wealth include France and Mexico, where median wealth is twice as high. In China, Hong Kong and Taiwan, the number is nearly three times higher, and in the United States, Brazil and the United Arab Emirates, the number is five times higher.
Horizontal transfer of wealth
Although Huge intergenerational wealth transfers After a long discussion, UBS pointed out in this year’s report that wealth is not only declining, but also “moving sideways” toward spouses.
Approximately $83 trillion is expected to be inherited over the next 20 to 25 years, of which UBS estimates that $9 trillion will be transferred “intragenerationally” or horizontally to spouses. Due to average life expectancy and the age gap between couples, most of the wealth transfer will go to women.
UBS added that spouses typically hold the inheritance for an average of four years before passing it on, with the largest horizontal and vertical wealth transfers occurring in the Americas.
