The 2024 Global Wealth Report from UBS predicts a significant increase in the number of global millionaires over the next five years. This growth is expected to occur in 52 out of 56 economies that were surveyed, showing a positive trend in wealth accumulation worldwide. The leading countries in terms of growth include Taiwan, Turkey, Kazakhstan, Indonesia, and Japan, each experiencing a substantial rise in the number of millionaires.
Outlier: United Kingdom
Despite the overall positive outlook on global millionaires, the United Kingdom stands out as an outlier in this trend. The forecast predicts a 17% decrease in the number of millionaires in the UK, which is alarming considering the economic status of the country. Chief Economist Paul Donovan expressed concern over the disproportionate number of millionaires in the UK compared to its economic performance, stating that it has more millionaires than it should have.
Several factors were cited as contributors to the decline of millionaires in the UK. This includes the introduction of sanctions against Russia, which has led to capital outflows from wealthy Russians who previously had assets in London. Additionally, the attractiveness of low-tax locations like Dubai and Singapore for the non-indigenous millionaire population has further contributed to the decline. Changes in the UK’s tax regime and political landscape were also mentioned as potential factors impacting the forecast.
The 2023 rebound in global wealth growth, with a 4.2% increase, after a decline in 2022, indicates a positive trend in wealth accumulation. The EMEA region led the growth, followed by Asia-Pacific and the Americas. The report also highlights wealth inequality as a growing concern, with high concentrations of wealth at the top of major economies skewing average wealth figures. Significant disparities between average and median wealth in countries like France, Mexico, and the US point to rising wealth inequality.
While discussions around intergenerational wealth transfers have been ongoing, the report sheds light on an emerging trend of intra-generational wealth transfers. UBS estimates that a significant portion of the expected $83 trillion wealth transfer over the next two decades will occur horizontally, between spouses. This horizontal wealth transfer is expected to benefit women, given life expectancy and age gaps within couples, leading to a shift in wealth ownership dynamics.
The future of global millionaires in 2024 presents a mixed picture of growth and decline, with certain countries experiencing significant shifts in wealth distribution. The forecast highlights the importance of understanding the factors driving these changes and the implications for wealth inequality and intra-generational wealth transfers. With evolving economic landscapes and changing geopolitical dynamics, the trajectory of global millionaires is a key indicator of broader wealth trends in the coming years.