Labour has sucked the confidence out of wealthy Brits
The government defines a high net worth individual as someone with an income of at least £170,000 and net assets of more than £430,000. Such people are undoubtedly in a comfortable position, but are hardly reaching non-dom status. Indeed, those just meeting the government’s definition would be politely turned down for a bank account at Coutts.
Many financial advisors and wealth managers consider HNWIs to be those who have between £1m and £5m in liquid assets. For the purposes of taking the temperature of the quite well-off, wealth managers at Saltus have polled HNWIs who have a minimum of £250,000 in investable assets, some of whom will have considerably more than this and some of whom will have just made the grade.
However you cut it, though, it’s clear they’re not a very happy bunch. The Saltus Wealth Index – which measures the economic confidence of the better-off – has plummeted to the lowest level they’ve ever recorded.
As we report today, most of them fully expect the Chancellor to raise taxes – something she may be forced to do if the OBR forecasts box her into a corner and growth doesn’t pick up over the year ahead. Just under half of this demographic have confidence in the UK economy. In the month after Labour won the election this figure stood at 84 per cent, so we’re witnessing quite some crash.
Interestingly, 36 per cent of respondents voted Labour at the last election, of whom two thirds now say they regret it. Changes to inheritance tax, pensions and national insurance are all cited as reasons, though a fair chunk of them also point to the addition of VAT to private school fees which, it must be pointed out, was at least in Labour’s manifesto. The fact that Labour has lost the confidence of so many wealthy voters should not be a surprise – not even to Labour – but that so many of them claim to have such little confidence in the health of the UK economy should set alarm bells ringing.
The country needs those with investable assets to actually invest them, and confidence is a key ingredient. Unfortunately, it’s unlikely to be restored by the latest data on growth, published today, meaning that the HNWIs – like the rest of us – could be left at the mercy of events.