The confidence of high net worth individuals in the UK economy has risen to record levels but some challenges remain.
According to the Saltus Wealth Index report, which surveyed 2,000 people with assets of £250,000 or more, the index level rose to 66.9 per cent from 64.4 per cent recorded in January 2024.
With 84 per cent of HNWIs now confident in the economy’s prospects, up 6 per cent since the first iteration of the report in October 2021.
Confidence increased further when respondents thought of their own wealth with 91 per cent confident in their own financial standing, the report found.
However, the report revealed some HNWIs are delaying key life decisions due to the financial pressures they face, such as putting off starting a business (31 per cent) or their retirement (25 per cent).
It also found 13 per cent of HNWs with children in private school will move them into state education next year, due to the increasing costs of education.
Saltus has said this will be exacerbated by the government’s announcement that VAT will be added to school fees from January 2025 with just 15 per cent of HNW parents saying the addition of VAT will have no impact on them or their children at all.
Dr Michael Peacey, senior lecturer, school of economics, at the University of Bristol, said: “Despite the growing optimism, there are lingering concerns. The upcoming Budget and the policies of the new Labour government are clearly weighing heavily on the minds of many HNWIs.
“Although the most significant tax announcements are still pending (the survey was undertaken in the aftermath of the July general election), the proportion of respondents who feel their current tax burden is appropriate has already declined from 64 per cent to 58 per cent.
"There is growing apprehension about potential changes to inheritance tax and capital gains tax, which are the two taxes which HNWIs already think are the least fair.”
alina.khan@ft.com
