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Rich people’s problems: Confidence in economy hits record low among wealthy Brits

By:

Senior City Reporter

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The NAO has warned against making private finance decisions as a means to avoid accounting classifications or achieve ‘off balance sheet’ investment and the eventual costs of maintaining or upgrading assets if they are handed back by the private sector. If costs are not accounted for properly, taxpayers will be exposed to the risks of higher public expenditure over the long term.
The NAO has warned against making private finance decisions as a means to avoid accounting classifications or achieve ‘off balance sheet’ investment and the eventual costs of maintaining or upgrading assets if they are handed back by the private sector. If costs are not accounted for properly, taxpayers will be exposed to the risks of higher public expenditure over the long term.

Confidence in the economy among high net worth Brits has tanked since the election of a Labour government last summer, according to data from the Saltus Wealth Index.

The study, which questioned 2,000 people in the UK with assets of £250,000 or more, revealed just under half – 48 per cent – of these so-called high net worth individuals (HNWI) had confidence in the UK economy.

This marks a steep decline from the beginning of Labour’s term when confidence levels in August last year fizzed at 84 per cent.

The survey comes as speculation mounts that Rachel Reeves has run out of fiscal headroom thanks to low growth and higher borrowing costs, leaving the Chancellor with a choice to make between deep spending cuts or fresh tax rises.

A vast majority of those surveyed expect Reeves to come back for more revenue in the next 12 months, with 83 per cent predicting further increases. The well-off respondents identified Capital Gains Tax (38%), Income Tax (37%) and Inheritance Tax (35%) as the most likely to be increased.

‘People feel that the UK economy is not on the right track’

Mike Stimpson, partner at Saltus, said: “The extent to which the confidence of high net worth individuals has collapsed demonstrates a missed opportunity for the new Government”.

Stimpson noted Prime Minister Sir Keir Starmer took office with “high levels of support” and “drove the highest levels of HNWI confidence in the UK economy we have ever recorded”.

“Confidence is a critical component in growth, and the fact that this vitally important group of people feel that the UK economy is not on the right track is a cause for concern,” he added. 

Of the 36 per cent of respondents who voted Labour last year, two thirds now say they regret their decision, with changes to inheritance tax and the imposition of VAT on private school fees cited as the top reasons. The impact of the government’s policies on business was raised by 16 per cent.

One respondent blasted that the Government “will raise any tax they can get away with”. 

Another added: “You just know that a Labour Government will increase the tax take where and when it can.”

The Report also found that HNWIs think high tax rates and a complex tax system remain the biggest barrier to wider economic growth, with 43 per cent citing this as the main issue, up from 2 per cent before the last Budget.

Dr Michael Peacey, senior lecturer in economics the University of Bristol, said: “The decline in the index reflects substantial shifts across several key measures and underscores a period of mounting apprehension among HNWIs about the UK’s economic projects

“There has also been a shift in how HNWIs feel about taxation in the UK, with anxieties about taxies rising further continuing to weigh heavily on HNWIs.”

Peacey added, should HNWIs “follow through with their plans to react” to economic woes, there could be “significant implications for both the domestic economy and global perceptions of the UK as a hub for wealth creators”.