British households experienced the second-steepest decline in wealth among major economies during 2024, a new wealth report has shown.
Only Turkey fared worse, with average wealth plummeting more than 14 per cent amid an economic crisis marked by inflation exceeding 75 per cent and interest rates hitting 50 per cent.
The findings have intensified concerns about Britain's economic trajectory and its struggle to retain wealthy residents.
According to UBS’s annual Wealth Report, mean household wealth in Britain fell3.6 per cent over the course of last year.
The decline reversed a positive trend that had seen household wealth increase by more than six per cent since the beginning of the decade.
The findings have intensified concerns about Britain's economic trajectory and its struggle to retain wealthy residents.
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Michel Frey, head UK high net worth in UBS's wealth management arm, pointed to two primary factors behind the decline.
He said: "Average real-term wealth per adult in the United Kingdom fell in 2024 because living-cost pressures and rising interest rates moved faster than either house prices or most financial markets.
"Naturally, this dented people's ability to build or retain wealth," he told City AM.
The FTSE 100's modest 5.7 per cent gain in 2024 significantly lagged behind other major indices.
Property prices grew just 4.7 per cent, providing limited support to household wealth accumulation during a period of elevated living costs.
The contrast with American wealth growth proved particularly stark. US household assets surged 11 per cent in 2024, part of a broader Americas region growth of 11 per cent that far exceeded the global average of 4.6 per cent.
America's wealth expansion saw the country gain more than 1,000 millionaires daily throughout the year.
The wealth decline hit Britain's richest particularly hard, with median household assets actually growing by more than five per cent,
GETTYThis growth coincided with the S&P 500 climbing over 25 per cent and the US economy expanding by 2.8 per cent, defying the stagnation affecting most developed nations.
Frey emphasised the performance gap between equity markets, describing the "muted gains" in London equities as a significant drag on British household wealth compared to New York's indices.
The wealth decline hit Britain's richest particularly hard, with median household assets actually growing by more than five per cent, indicating the top end of the wealth distribution bore the brunt of losses, Frey noted.
The exodus of wealthy individuals accelerated in 2024 was partly driven by the Government's decision to abolish non-dom status
GB NEWSLooking ahead, he identified structural reforms as essential for reversing the trend. "Where the UK does lag is in the breadth of its public equity market and the depth of domestic risk-capital formation," he said.
"Revitalising the London Stock Exchange and encouraging more high-growth companies to list at home would go a long way to anchoring future wealth creation here."
The exodus of wealthy individuals accelerated in 2024, with Henley and Partners estimating 10,800 dollar millionaires departed Britain, partly driven by the Government's decision to abolish non-dom status and implement other tax increases in the Autumn Budget.
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