The UBS 2024 Global Wealth Report predicts a continued increase in the number of global millionaires over the next five years. This growth is expected across 52 out of 56 economies, spanning both developed and developing nations. Leading this surge is Taiwan, with a projected 47% rise in millionaires fueled by the flourishing microchip industry and an influx of wealthy immigrants. Following closely are Turkey (43%), Kazakhstan (37%), Indonesia (32%), and Japan (28%). Even economic powerhouses like the U.S. and mainland China are set to experience a 16% and 8% increase respectively. However, the U.K. stands out as an exception, facing a projected 17% decline in its millionaire population.
According to Paul Donovan, UBS Global Wealth Management’s chief economist, the U.K. currently boasts the third-highest number of millionaires globally, a position he deems as undeserved relative to its economic standing. While countries like France and Italy are poised to see a more natural growth in their millionaire populations, the U.K. is grappling with factors that threaten its wealth landscape. These challenges include capital outflows linked to the introduction of sanctions against Russia and the constant migration of non-indigenous millionaires seeking tax-friendly havens like Dubai and Singapore.
The changing distribution of wealth is attributed to global economic shifts and the dynamic movement of capital. The U.K.’s decision to alter its tax regime for non-domiciled individuals, initiated by the previous Conservative government, has also played a role in the projected decline in millionaires. Moreover, the impact of geopolitical events, such as sanctions against Russia, has further contributed to the shifting millionaire landscape in the U.K. Despite speculation, Donovan did not attribute the forecasted decline to the recent political transition in the U.K. following the election of the center-left Labour Party.
While the number of millionaires in countries like the U.K. and the Netherlands is projected to decrease, others like Russia are anticipated to experience growth in their millionaire populations. The UBS report highlights that the global wealth growth rebounded in 2023, recording a 4.2% increase after a 3% decline in the previous year. Notably, the EMEA region led the recovery with 4.8% growth, outperforming the Asia-Pacific (4.4%) and the Americas (3.5%). The report also discusses wealth mobility and the rising disparity between average and median wealth figures, indicating a trend of increasing wealth concentration among the affluent.
In addition to intergenerational wealth transfer, the report notes a significant trend of intra-generational wealth movement, particularly to spouses. Of the projected $83 trillion expected to be passed on over the next two decades, approximately $9 trillion is estimated to be transferred within couples. This horizontal wealth transfer is expected to significantly benefit women due to average life expectancy and age differentials within partnerships. Ultimately, this trend underscores the evolving dynamics of wealth distribution beyond traditional inheritance patterns.
The evolving landscape of global millionaires presents a multifaceted picture, with various economic, political, and societal factors influencing wealth distribution. While some countries experience notable growth in their millionaire populations, others face challenges that lead to projected declines. Understanding these trends and the underlying dynamics is crucial for policymakers, economists, and individuals seeking to navigate the changing terrain of global wealth.