London - The UK is close to having one million millionaire households, more than any other country in Europe, a new report revealed.
Some 961 000 households in 2015 had more than $1m worth of assets, a 12 percent rise on the year before, according to the Global Wealth report by the Boston Consulting Group (BCG). The UK has the fourth-largest number of millionaires (when measured in US dollars), above Switzerland, Germany and France, which have 519 000, 446 000 and 445 000 millionaire households respectively.
The number of millionaire households worldwide grew by 6 percent to 18.5 million, of which 8 million are in the US, 2.1 million are in China and 1.1 million are based in Japan.
Paul Nowak, deputy general secretary of Trades Union Congress (TUC), a body that represents British trade unions, said that little is being done to change the status quo. “It says much about current Britain, that at a time when millions are struggling to pay their rent or get a mortgage, others are paying for swimming pools and cinemas to be constructed in the basements of their homes in Chelsea,” Nowak told The Guardian.
The fastest growing group of millionaires are those with assets of between $20m and $100m, a category known to private bankers as ultra-high-net-worth individuals. The report, aimed at wealth managers, looks at private financial wealth, which includes cash and deposits, life insurance payments, mutual funds, listed and unlisted equities, debt securities and pension entitlements. It excludes property and luxury goods.
The BCG said that the wealthy continued to invest in offshore centres despite tighter regulations with $10trn of assets held overseas in 2015, a rise of 3 percent compared to the year before. The UK was among the top three sources of offshore wealth along with China and the US. Rich Britons held 6 percent of their wealth abroad in 2015.
“Although regulatory measures aimed at fighting tax evasion will continue to persuade some oldworld investors to repatriate their wealth, regulation also stabilises the market and provides new opportunities to move fully-taxed wealth offshore in search of better service quality, product diversity, economic stability, and the like,” said Anna Zakrzewski, a BCG partner and co-author of the report.
In the UK, total private wealth grew by 3.6 percent to $9.3trn. This compares to an overall growth of 4.3 percent in western Europe, a slower rate than in 2014. A vote to leave the EU in this month's referendum and an economic slowdown in China could continue to slow private wealth growth.
“Regional wealth growth in western Europe is expected to continue at rates similar to those in recent years, although this expansion could be held back by the low interest-rate environment and the potential exit of Great Britain from the European Union,” said the BCG report. “Further pressure could come from economic slowdowns in countries outside the region, such as China, in which western European nations have high investment stakes.”
THE INDEPENDENT