High Net Worth Trends in the UK to 2015 by WealthInsightReports

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									        High Net Worth trends in the
                UK to 2015




China – The Future of HNWIs to 2015: Opportunities for Wealth Managers and Private Banks
Publication date: March, 2012.
Report code: WI0032MRa licensed product and is not to be photocopied.
© WealthInsight. This report is
TABLE OF CONTENTS


TABLE OF CONTENTS

1       Introduction ............................................................................................................................ 5
1.1       What is this Report About? ............................................................................................................ 5
2       Executive Summary ............................................................................................................... 9
3       Wealth Sector Fundamentals .............................................................................................. 11
3.1       Political Background to the Wealth Sector ................................................................................. 11
3.2       Economic Background to the Wealth Sector .............................................................................. 12
3.3       Benchmarking UK Wealth in Context .......................................................................................... 14
3.3.1 Distribution of Wealth ........................................................................................................................................ 14
4       Findings from the WealthInsight HNWI Database ............................................................. 17
4.1       Trends in HNWI Wealth to 2015 ................................................................................................... 17
4.1.1     HNWI Trend Analysis ........................................................................................................................................ 17
4.1.2     HNWI Volume Trend Analysis ........................................................................................................................... 18
4.1.3     HNWI Wealth Trend Analysis ............................................................................................................................ 19
4.1.4     Per Capita HNWI Net Worth Trend Analysis ..................................................................................................... 21
4.1.5     Trends of the Wealth Bands .............................................................................................................................. 22
5       Appendix ............................................................................................................................... 25
5.1       Cities, Counties and Regions....................................................................................................... 25
5.2       Education ...................................................................................................................................... 26
5.3       Philanthropy .................................................................................................................................. 26
5.4       Demand for Intergenerational Wealth Transfer and Younger Clientele .................................... 27
5.5       Regulatory Environment in the UK .............................................................................................. 27
5.5.1     Regulations on Non-domiciled Residents ......................................................................................................... 28
5.5.2     Banking Regulations .......................................................................................................................................... 28
5.5.3     Regulations on Taxes ........................................................................................................................................ 29
5.5.4     Regulations on Fund Management ................................................................................................................... 31
5.5.5     Regulations on Foreign Investment ................................................................................................................... 31
5.5.6     Regulations on Real Estate ............................................................................................................................... 31
5.5.7     Regulations on Foreign Investment in Real Estate ........................................................................................... 32
5.5.8     Regulations on Wealth Management and Private Banking ............................................................................... 32
5.5.9     Regulations Related to Investment and Employment ....................................................................................... 32
5.6       Key Economic Trends and Drivers .............................................................................................. 33
5.6.1     GBP to USD Moving Annual Average Exchange Rate ..................................................................................... 33
5.6.2     Real GDP Growth .............................................................................................................................................. 34
5.6.3     Per Capita GDP ................................................................................................................................................. 35
5.6.4     Gross Savings Rate as a Percent of GDP ........................................................................................................ 36
5.6.5     Domestic Market Capitalization ......................................................................................................................... 37
5.6.6     Housing Price Index .......................................................................................................................................... 38
5.6.7     Commodity Index ............................................................................................................................................... 39
5.6.8     Foreign Direct Investment ................................................................................................................................. 40


High Net Worth trends in the UK to 2015
© WealthInsight. This report is a licensed product and is not to be photocopied.                                                                                         Page 1
TABLE OF CONTENTS


5.6.9     Investments of FII‟s in Equity Products ............................................................................................................. 41
5.6.10    Inflation Rate ..................................................................................................................................................... 42
5.6.11    Repo Rate.......................................................................................................................................................... 43
5.6.12    Balance of Payments ......................................................................................................................................... 44
5.6.13    Government Debt .............................................................................................................................................. 45
5.6.14    Stock Market Performance ................................................................................................................................ 46
5.6.15    HNWI Wealth vs. GDP Ratio ............................................................................................................................. 47
5.6.16    Capital Formation as Percent of GDP ............................................................................................................... 48
5.6.17    Disposable Income as Percent of GDP ............................................................................................................. 49
5.7       Background of the UK .................................................................................................................. 50
5.7.1 Political and Economic Background .................................................................................................................. 50
5.7.2 Social Background ............................................................................................................................................. 51
5.7.3 Technological Background ................................................................................................................................ 52
6      About WealthInsight ............................................................................................................ 53




High Net Worth trends in the UK to 2015
© WealthInsight. This report is a licensed product and is not to be photocopied.                                                                                             Page 2
TABLE OF CONTENTS


LIST OF TABLES

Table 1: HNWI Wealth Band and Group Definitions ............................................................................................. 6
Table 2: HNWIs – Volume by Wealth Band, 2007-15 ........................................................................................ 18
Table 3: HNWIs – Wealth by Wealth Band (in US$ Billion), 2007-15 ................................................................ 20
Table 4: HNWIs – Volume Distribution Wealth Pyramid, 2011 ........................................................................... 23
Table 5: HNWIs – Wealth Distribution Wealth Pyramid, 2011 ............................................................................ 24
Table 6: Largest 10 UK cities by population and number of UHNWIs ................................................................ 26
Table 7: GBP to USD Moving Annual Average Exchange Rate, 2006–15 ........................................................ 33
Table 8: Real GDP Growth Rate, 2006–15 ........................................................................................................ 34
Table 9: GDP Per Capita, 2006–15 .................................................................................................................... 35
Table 10: Gross Savings as a % of Real GDP, 2006–2015 ............................................................................... 36
Table 11: Domestic Market Capitalization, 2006–10 .......................................................................................... 37
Table 12: Housing Price Index, 2006–10 ............................................................................................................ 38
Table 13: Commodity Indices, 2006–15 ............................................................................................................. 39
Table 14: Foreign Direct Investments, 2006–2015 ............................................................................................. 40
Table 15: Investments of FIIs in Equity Products, 2006–10 ............................................................................... 41
Table 16: Inflation Rate, 2006–15 ....................................................................................................................... 42
Table 17: Repo Rate, 2006–15 ........................................................................................................................... 43
Table 18: Balance of Payments, 2006-10........................................................................................................... 44
Table 19: Government Debt to GDP, 2006–10................................................................................................... 45
Table 20: Stock Market Performance, 2006–10 ................................................................................................. 46
Table 21: HNWI Wealth vs. GDP Ratio, 2006–15 .............................................................................................. 47
Table 22: Capital Formation as % of GDP, 2006-15 .......................................................................................... 48
Table 23: Disposable Income as % of GDP, 2006-15 ........................................................................................ 49




High Net Worth trends in the UK to 2015
© WealthInsight. This report is a licensed product and is not to be photocopied.                                                                               Page 3
TABLE OF CONTENTS


LIST OF FIGURES

Figure 1: HNWI Wealth Band Definitions .............................................................................................................. 7
Figure 2: Map of the United Kingdom ................................................................................................................... 8
Figure 3: HNWIs in the UK, 2007-15 .................................................................................................................. 14
Figure 4: HNWIs – UK vs. RoW .......................................................................................................................... 15
Figure 5: Asset Price Performance, 2007-11...................................................................................................... 16
Figure 6: HNWIs – Growth Factor Correlation, 2007-11 .................................................................................... 17
Figure 7: HNWIs – Volume by Wealth Band, 2007-15 ....................................................................................... 19
Figure 8: HNWIs – Wealth by Wealth Band (in US$ Billion), 2007-15 ............................................................... 20
Figure 9: HNWIs – Per Capita Net Worth (in US$ Million), 2007-15 .................................................................. 21
Figure 10: HNWIs – Volume Distribution Wealth Pyramid, 2011 ....................................................................... 23
Figure 11: HNWIs – Wealth Distribution Wealth Pyramid, 2011 ........................................................................ 24
Figure 12: GBP to USD Moving Annual Average Exchange Rate, 2006–15 ..................................................... 33
Figure 13: Real GDP Growth (%), 2006–15 ....................................................................................................... 34
Figure 14: GDP Per Capita, 2006–15 ................................................................................................................. 35
Figure 15: Gross Savings as a % of Real GDP, 2006–2015 .............................................................................. 36
Figure 16: Domestic Market Capitalization, 2006–10 ......................................................................................... 37
Figure 17: Housing Price Index, 2006–10 .......................................................................................................... 38
Figure 18: Commodity Indices, 2006–15 ............................................................................................................ 39
Figure 19: Foreign Direct Investments, 2006–2015............................................................................................ 40
Figure 20: Investments of FIIs in Equity Products, 2006–10 .............................................................................. 41
Figure 21: Inflation Rate, 2006–15 ..................................................................................................................... 42
Figure 22: Repo Rate, 2006-15 .......................................................................................................................... 43
Figure 23: Balance of Payments, 2006-10 ......................................................................................................... 44
Figure 24: Government Debt to GDP, 2006–10 ................................................................................................. 45
Figure 25: Stock Market Performance, 2006–10 ................................................................................................ 46
Figure 26: HNWI Wealth vs. GDP Ratio, 2006–15 ............................................................................................. 47
Figure 27: Capital Formation as % of GDP, 2006-15 ......................................................................................... 48
Figure 28: Disposable Income as % of GDP, 2006-15 ....................................................................................... 49




High Net Worth trends in the UK to 2015
© WealthInsight. This report is a licensed product and is not to be photocopied.                                                                              Page 4
       INTRODUCTION

1 Introduction


1.1    What is this Report About?


       This report is the result of WealthInsight‟s extensive research covering the high-net-wo
								
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