Some 55% of high net worth individuals in this country believe that the UK is currently not supportive of wealth creation/creators.

Ahead of the results of today’s general election, Wealth Club, the investment platform for wealthy and sophisticated investors, has surveyed 744 clients about their views on wealth creation, current taxes and the attractiveness of the UK.

The poll also found that 42% of High-net-worth’s (HMW) feel the UK is not an attractive place to set up a business and 31% now feel more inclined to leave the UK for financial reasons versus 12 months ago

The survey is the inaugural ‘British Wealth Report’ that will be carried out bi-annually to monitor ongoing sentiment of British ‘millionaire’ investors.

These people are important to the UK, according to Nicholas Hyett, Investment Manager at Wealth Club. He points out that the 100 highest earners pay an average of £46m in tax each, while the top 100,000 earners pick up a quarter of the total income tax and capital gains tax bill despite accounting for just 0.3% of UK taxpayers. This is according to a Freedom of Information Request made by Wealth Club to HMRC in November 2023.

Hyett commented: “The UK has an image problem. Wealthy investors think the country is an unappealing place to start a business, with a culture that’s unsupportive of wealth creators and high levels of taxation.”

Changing this group’s perception of the UK should be a key goal for any incoming government, he argues.

Millionaires are already leaving the UK in droves – costing the exchequer tax revenues and draining the economy of the entrepreneurs and investors who start and support young businesses,” he added.

Hyett added: “The Labour Party, the likely winners of this election, have set out their stall as supporters of growth and wealth creation. They have some promising building blocks – with wealthy investors generally expecting the UK to achieve modest economic growth over the next five years and some surprising positivity around smaller UK companies. That’s fortunate, because politicians have a lot of work to do in burnishing the UK’s credentials as a good place to do business.

“It’ll be interesting to see what progress they’ve made by the end of the year in the second edition of this report.”

Wealth Creation

+ 55% of HNWs felt that the UK isn’t supportive of wealth creation/creators.

+ 42% of HNWs feel that the UK was not an attractive place to set up a business.

+ 31% of respondents said that they felt more inclined to leave the UK for financial reasons, compared to 12 months ago.

+ 81% of HNWs felt that the UK is in a worse economic state than it was 5 years ago. Just 12% said it was in better shape.

+ When questioned about the outlook for the UK economy, 45% thought it would grow moderately or significantly, whereas 11% thought it would shrink.

+ Looking ahead, 78% of HNWs believe that interest rates will be lower this time next year, whereas 19% think they will be about the same.

Taxes

+ 60% expect taxes to rise, irrespective of whoever wins, whereas 37% only expect taxes to rise if Labour is elected.

+ Regardless of the outcome of the election, 83% of those surveyed expected their personal tax burden to be higher in the next 12 months. Whereas 17% expected it to be less or about the same.

+ 24% of clients said that they feel poorer than they did 12 months ago, whereas 27% felt wealthier.

+ 71% of those surveyed felt that the current rate of taxation in the UK is too high, whereas 22% felt it was about right. 7% said it was too low.

+ Given the opportunity to cut just one of the UK’s taxes, 42% would opt for a cut to inheritance tax.

Investing

+ Just 32% of clients felt that the UK was an attractive place to invest, despite 39% of HNWs feeling that the UK stock market would rise over the next year.

+ When considering the most attractive markets for investors, the US stock market was the most attractive for 47% of HNWs, followed by UK Smaller Companies (41%) and just one in four (25%) felt that large listed UK companies were currently an attractive investment.