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UK Projected to See Highest Millionaire Loss on Record

Dr. Hannah White OBE

Dr. Hannah White OBE

Dr. Hannah White OBE is Director and CEO of the Institute for Government in London.

The most striking forecast for 2024 is that the UK will become the country with the second-highest net outflow of millionaires. With the country projected to lose 9,500 of its high-net-worth individual population in 2024 — more than double the 4,200 lost in 2023 — over 7% of the 128,000 millionaires projected to move globally in 2024 will be choosing to depart the UK. This is a remarkable indictment of the political and policy climate in the country which, alongside Japan and Hong Kong (SAR China), is one of only three entries in the Top 15 wealth ranking to have seen a net loss in high-net-worth residents over the decade from 2013 (8%, 6%, and 4%, respectively).  

These figures reflect a steady accumulation of factors detracting from the UK’s appeal to high-net-worth individuals. The hangover from Brexit continues to be felt, with the City of London no longer seen as the financial center of the world, despite efforts to retain city employers with the scrapping of EU rules limiting bankers’ bonuses in 2022. The war in Ukraine and resulting energy crisis hit the UK worse than any other country in Western Europe, according to the IMF, because of the country’s overreliance on gas. The consequent rise in inflation continues to impact considerably on the cost of living in the UK. 

The impact of external factors on the economic situation has been compounded by significant political turmoil — with three Conservative prime ministers taking power in quick succession in the second half of 2022. Boris Johnson’s scandal-driven departure from office was followed by the fleeting and economically disastrous Liz Truss premiership before the instalment of former finance minister Rishi Sunak. This domestic instability, accompanied by a lack of policy space to address the structural factors impeding the UK economy has contributed to an uncertain investment climate.

Fast-moving traffic on the streets of London’s financial district

Less than 18 months since Sunak took office, the UK faces further political change, with a general election now set for 4 July 2024, and polls having pointed consistently since the start of 2023 to a victory for the opposition Labour party led by Keir Starmer. 

The outflow of high-net-worth individuals already generated by the economic and political context is now being accelerated by policy decisions ahead of the election. On top of the 40% duty already imposed on estates above a GBP 325,000 threshold, the Conservative government has adopted the thrust of the Labour opposition’s policy of ending the UK’s non-dom tax regime from 2025. And for those educating their children in the UK’s well-regarded private school sector, Labour’s commitment to removing the exemption from 20% VAT enjoyed by private schools will be a further unwelcome development.   

Growing and developing economies continue to generate and export millionaires

The other countries projected to top the rankings for net outflows of high-net-worth individuals in 2024 will do so for quite different reasons from the UK. Both China and India (ranked 1st and 3rd, respectively) are seeing high net outflows because of the success of their sizeable economies in generating millionaires, although slowing wealth growth in China in recent years could mean sustained high outflows become more damaging over time. 

As do those from many other developing nations, (including notably Brazil, Vietnam, South Africa, and Nigeria), Indian millionaires often depart the sub-continent in search of a better lifestyle, safer and cleaner environments, and access to more premium health and education services. Elsewhere, regional threats and uncertainty over the security stance of the USA following a potential Trump victory in the 2024 US presidential election in November mean that South Korea and Taiwan are continuing to see net outflows of high-net-worth individuals.

Compared to recent years, the rapid outward migration of Russian millionaires has slowed in 2024. Most of those with the desire and opportunity to leave have already taken the decision to do so — the country has lost almost a quarter of its millionaires since 2013. The March 2024 presidential elections produced the foregone conclusion of a Putin victory — with the president securing an unprecedented fifth term after apparently winning 88% of the vote. And with Russia gaining ground in the war against Ukraine and limited opportunities for its high-net-worth individuals to settle elsewhere, some may be choosing to return to the country. 

Active policy choices continue to entice wealthy investors

The countries with the greatest growth in high-net-worth individuals continue to be those who have prioritized policies designed to entice millionaires to their shores — nine of the Top 10 countries most successful at attracting in millionaires in 2024 have formal investment migration programs and actively encourage foreign direct investment in return for residence or citizenship rights. 

The UAE — with low crime rates and zero personal income, capital gains, and inheritance taxes — is at the top of the list again, while stable democracies with high standards of living, including Australia and Canada, also continue to do well. Despite the unpredictability of the outcome of its election, the USA is once again becoming an appealing destination — with a thriving tech sector and attractive environment for retirement. Within Europe, Italy and Greece are benefiting from the decision of Portugal to actively shut down one of its golden visa options, namely the real estate-linked route, which previously encouraged wealthy immigrants.

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