UK Millionaire Population Drops to Two-Decade Low Amidst Tax Concerns

The number of millionaires in the United Kingdom has fallen to its lowest level in two decades, with 442,000 individuals holding at least £1 million in assets, including pensions and property. This figure represents a 7% decrease from 2024, making it the smallest number recorded since the 2008 financial crisis, according to analysis from the Adam Smith Institute (ASI), a free-market think tank.

The report attributes the decline to several factors, including high current taxation levels, the potential introduction of a wealth tax, the abolition of the non-domicile tax regime, and a perceived culture hostile to wealth creators. A fall in asset prices and a lower household savings rate are also cited as contributing reasons.

Andrew Griffith, a Conservative business spokesman, stated that a decline in millionaires who contribute to the tax pot, create jobs, and establish businesses is a cause for concern. He described it as a "shameful sign" when ambitious individuals choose to leave the country.

Mitchell Palmer of the ASI emphasized that while some on the left might view the decline as a success, it should serve as a warning signal. He noted that each millionaire who departs represents a loss of capital for British businesses, reduced international connections, and a weakened entrepreneurial spirit within the economy. James Quarmby, a partner at law firm Stephenson Harwood, echoed these concerns, stating that this demographic is crucial for private sector businesses and the overall tax base.

The ASI report suggests that measures to reverse this trend should include the abolition of inheritance tax and reductions in capital gains tax. The analysis also draws parallels with other countries, noting that France, Austria, and the Netherlands abandoned wealth taxes after experiencing significant outflows of millionaires or other avoidance behaviors. The report posits that Britain, already experiencing a 'haemorrhaging of wealth,' could expect similar outcomes, with every departing millionaire constituting a loss to the country.