The UBS 2024 Global Wealth Report predicts a significant rise in the number of global millionaires over the next five years, with notable growth in countries such as Taiwan, Turkey, Kazakhstan, Indonesia, and Japan. These increases are driven by various factors such as industry growth, immigration, and economic trends. However, the report also highlights a stark outlier in the U.K., where the number of millionaires is forecasted to decline by 17%. This decline is attributed to factors such as wealth distribution shifts, capital outflows, and changing economic conditions. According to Paul Donovan, chief economist at UBS Global Wealth Management, the U.K.’s current number of millionaires is disproportionate to its economic performance, and natural growth in countries like France and Italy contrasts with the U.K.’s projected decline.
The U.K.’s introduction of sanctions against Russia and changes in tax regimes are cited as contributing factors to the decline in millionaires. Wealthy Russians, who have traditionally used London as a hub for their assets, are now seeking other locations due to political and economic uncertainties. Additionally, the U.K.’s “non-indigenous millionaire population” is exploring alternative low-tax destinations like Dubai and Singapore. These factors, along with the impact of currency fluctuations and market trends, are expected to lead to a significant decrease in the number of dollar millionaires in the U.K. and the Netherlands.
The 2024 Global Wealth Report also addresses wealth inequality and redistribution trends. While there is an overall improvement in wealth mobility, with individuals having a higher chance of moving up wealth brackets, growing concentrations of wealth at the top are skewing average wealth figures. In countries like France, Mexico, mainland China, Hong Kong, Taiwan, the U.S., Brazil, and the United Arab Emirates, the disparity between average and median wealth is striking. This disparity signifies increasing inequality, with wealth becoming more concentrated among the wealthiest individuals.
The report discusses the dynamics of inter-generational wealth transfer and highlights an interesting trend in wealth distribution. While a significant amount of wealth is expected to be transferred between generations in the coming years, there is also a horizontal wealth transfer happening between spouses. UBS estimates that around $9 trillion of the projected $83 trillion transfer will be passed horizontally to spouses. Given factors such as life expectancy and age gaps within couples, a substantial portion of this wealth transfer is expected to go to women. This intriguing phenomenon of horizontal wealth transfer within couples indicates a shift in traditional inheritance patterns and highlights the importance of understanding changing dynamics in wealth distribution.
The UBS 2024 Global Wealth Report paints a complex picture of the evolving landscape of global millionaires, wealth distribution, and inter-generational wealth transfer. While some regions are experiencing significant growth in the number of millionaires, others are facing declines due to various economic, political, and social factors. The report also sheds light on the widening wealth gap and changing patterns of wealth redistribution within families. Understanding these trends and their implications is crucial for policymakers, financial institutions, and individuals navigating the shifting dynamics of wealth accumulation and distribution in the global economy.
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