The 2024 Global Wealth Report from UBS predicts a continuous rise in the number of global millionaires over the next five years. The report indicates that the number of adults owning $1 million or more is expected to increase in 52 out of 56 developed and developing economies surveyed between 2023 and 2028. Leading this growth is Taiwan, thanks to its tech industry boom and an influx of wealthy immigrants, with projections showing a 47% increase. Following closely behind are Turkey (43%), Kazakhstan (37%), Indonesia (32%), and Japan (28%).
Contrary to the global trend, the U.K. stands out as a stark outlier with a forecasted 17% decline in the number of millionaires. Paul Donovan, chief economist at UBS Global Wealth Management, expressed surprise at the high number of millionaires in the U.K. compared to its economic standing. He highlighted that the U.K.’s growth is offset by capital outflows due to various factors, including the country’s sanctions against Russia and the trend of wealthy individuals seeking low-tax locations like Dubai and Singapore.
Donovan attributed the decline in U.K. millionaires to natural shifts in wealth distribution as the world economy undergoes structural changes, leading to capital movement across borders. While some speculate about the impact of political changes like the U.K.’s recent government transition, Donovan emphasized that tax regime alterations and other economic factors play a more significant role in shaping the millionaire landscape.
The UBS report highlights the rebound in global wealth growth in 2023, with a significant uptick of 4.2% following a decline in the previous year. Regional variations show that the EMEA region led the growth with 4.8%, overshadowing Asia-Pacific and the Americas. However, the report presents a mixed picture of wealth inequality, noting growing clusters of high wealth in major economies that skew average wealth figures and concentrate wealth among the richest.
While discussions on the intergenerational wealth transfer have been prevalent, this year’s report acknowledges a shift towards intra-generational wealth transfers, particularly to spouses. Forecasting approximately $83 trillion to be passed on in the next two decades, UBS estimates that $9 trillion will be transferred horizontally to spouses. Women are expected to inherit a significant portion of this wealth, with spouses holding onto this inheritance for an average of four years before passing it on. This shift marks a notable trend in the evolution of wealth dynamics.
The global millionaire landscape reflects a combination of growth opportunities and challenges. While some regions like Taiwan are poised for significant gains, others like the U.K. face economic headwinds that impact the millionaire population. Understanding the underlying factors that drive wealth distribution and wealth transfer dynamics is essential in navigating the ever-evolving global wealth landscape. As the UBS report suggests, wealth mobility and inequality trends shed light on the complex interplay of economic, social, and political forces that shape the future of global millionaires.