Confidence in the UK economy among high net worth individuals (HNWIs) has dropped to record low, with fewer than half now expressing confidence in the economy, according to the latest Saltus Wealth Index Report.
Now in its seventh iteration, wealth management firm Saltus surveyed 2,000 people with assets of £250,000 or more.
The latest Index level has fallen by 13% from 66.9 to 58.2 in less than six months.
This represents a 10% decrease from the 64.4 recorded a year ago.
Research found that 48% of HNWIs have confidence in the economy, while a third (33%) say they feel “unconfident”.
Those who say they are “very confident” has fallen from 38% to 19%, an all-time low.
The index, which has been tracking HNWIs’ confidence in the UK economy since 2021, has now fallen below the previous low of 59.5 recorded shortly after the Budget in 2022.
A significant majority (66%) of the 36% of respondents who voted Labour at the last General Election now regret their decision.
The main reasons for regret included: changes to Inheritance Tax (IHT) (18%), adding VAT to private school fees (18%), the impact on business (16%), changes to tax thresholds and pensions (16%), changes to the Winter Fuel Allowance (15%) and the increase in Employer National Insurance (15%).
The research found that most HNWIs (83%) expect the Labour Government to raise taxes further in the next 12 months, with Capital Gains Tax (38%), Income Tax (37%) and IHT (35%) predicted as the most likely targets.
HNWIs believe tax rises are the single biggest threat to their wealth, with 47% citing this as their biggest concern.
They also think high tax rates and a complex tax system remain the biggest barrier to wider economic growth.
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, who had high levels of support when they came to power 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 – the wealth creators, employers and investors in the businesses of tomorrow – feel that the UK economy is not on the right track is a cause for concern.”
Dr Michael Peacey, senior lecturer, school of economics, at 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 prospects.
“There has also been a shift in how HNWIs feel about taxation in the UK, with anxieties about taxes rising further continuing to weigh heavily on HNWIs.”
Peacey added: “The survey also suggests that tax changes are the primary reason that around 66% of HNWIs who voted Labour in 2024 now regret that decision.
“Looking ahead, it will be interesting to observe whether HNWIs follow through with their plans to react to the UK’s economic challenges.
“Such actions could have significant implications for both the domestic economy and global perceptions of the UK as a hub for wealth creators.”
