High-net-worth individuals are feeling increasingly bullish about the future of the UK economy, a new report has found.
The Saltus Wealth Index Report 2024, published today, analyses responses from 2,000 UK HNWs (individuals with investable assets of at least £250,000), on topics including taxes, personal finances and pensions. Almost eight in 10 respondents say they feel confident about the future of the UK economy over the next six months. The optimism is highest among the youngest and richest HNWs.
Yet inflation still remains a major cause of concern. HNWs note it is the biggest threat to their wealth, followed by tax changes and energy prices.
‘Despite many unresolved uncertainties being carried forward into 2024, there has been an increase in confidence among HNWIs,’ notes Dr Michael Peacey, senior lecturer, School of Economics at the University of Bristol. ‘This is driven by increases in both individuals’ confidence about their own finances and in the UK economy.’
The wealth, generational and work divide in the UK economy
The report shows overall confidence in the UK economy has increased from 71 per cent to 78 per cent over the last six months. This marks a significant recovery from the four-year low of 67.27 per cent recorded in January 2023. However, there are notable disparities based on age, working status and wealth.
The greatest optimism is recorded among HNWs aged 18-24 years old: 52 per cent say they feel very confident, while 38 per cent are confident. The number drops significantly in the 55-plus age group: just 30 per cent feel confident, down from 36 per cent in the previous six months.
A similar split is seen between working (21 per cent) and retired (21 per cent) respondents. Employed HNWs are also slightly more likely to feel confident in the future of the UK economy than their self-employed peers (84 per cent vs 75 per cent).
Meanwhile, nine in 10 respondents in the wealthiest group (net worth of £3 million-plus) reported feeling confident, compared with 53 per cent of respondents worth £250,000-£499,999. HNWs who have received financial advice are more than twice as likely to feel confident than those who have not (87 per cent vs 32 per cent).
Despite inflation falling by 3.2 percentage points to 4.7 per cent in November 2023, it is still considered the biggest risk to wealth (28 per cent of respondents). This rises to 45 per cent among the 55-plus age group. Tax changes (27 per cent) and high energy prices (26 per cent) are also cited as top ranking concerns by all respondents.