With polls opening in less than 24 hours, Wealth Club, an investment platform for affluent and sophisticated investors, has unveiled its first ‘British Wealth Report’.
The research sheds light on the current sentiment of Britain’s richest individuals regarding wealth creation, tax policy and Britain’s attractiveness as a business centre.
Nicholas Hyett, Investment Manager 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 a culture that does not support wealth creators and burdensome taxes. These individuals are crucial to the UK economy. The top 100 earners each contribute an average of £46m in tax, while the top 100,000 earners cover a quarter of total income 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 Britain.”
The report shows that there is great dissatisfaction among high-net-worth individuals (HNWIs):
Wealth creation: 55% believe that Britain does not support wealth creation or its creators. 42% view Britain as an unattractive place to set up a business, and 31% are more likely to leave the UK for financial reasons than they were 12 months ago.
Economic prospects: 81% believe Britain is in a worse economic state than five years ago, while only 12% see improvement. For the future, 45% expect moderate or significant economic growth, while 11% expect a decline. Additionally, 78% expect lower interest rates next year, and 19% expect them to remain the same.
Taxes: 60% predict tax increases regardless of the election outcome, and 37% expect tax increases only if Labor wins. A striking 83% foresee a higher personal tax burden in the next twelve months. Meanwhile, 24% feel poorer than 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 choice, 42% would reduce inheritance taxes.
Investment sentiment: Only 32% see Britain as an attractive investment destination, although 39% believe the UK stock market will rise next year. The US stock market is seen as the most attractive by 47% of high net worth individuals, followed by UK smaller companies (41%), while only 25% find large listed UK companies attractive to invest in.
As the Labor Party, the expected winners of these elections, position themselves as proponents of growth and wealth creation, they face the challenge of increasing Britain’s appeal to investors and entrepreneurs. The next edition of the British Wealth Report, due out at the end of this year, will reveal whether the new government has managed to improve Britain’s business reputation.