The 2024 Global Wealth Report from UBS predicts a significant rise in the number of global millionaires over the next five years with only a few countries showing a contrasting trend. It is projected that the number of adults owning $1 million or more will increase in 52 out of 56 developed and developing economies between 2023 and 2028. Surprisingly, the U.K. stands out as a stark outlier, with a forecasted 17% decline in the number of millionaires. This contrasts sharply with the expected growth in countries like Taiwan, Turkey, Kazakhstan, Indonesia, and Japan, where the number of millionaires is set to surge by double-digit percentages.
The substantial growth in the number of millionaires in countries like Taiwan can be attributed to factors such as the booming tech industry and an increase in immigration by wealthy individuals. On the other hand, the U.K.’s decline is influenced by capital outflows, natural shifts in wealth distribution, and changes in tax regimes. The introduction of sanctions against Russia and the search for low-tax locations by non-indigenous millionaires have also contributed to the forecasted decline. The impact of these factors outweighs any potential growth that could be driven by economic changes or political shifts in the region.
The report also highlights trends in wealth mobility and inequality, indicating an overall improvement in wealth mobility but a concerning rise in wealth concentration among the richest individuals in many countries. While the average wealth in some nations may show an increase, the median wealth is declining, pointing towards higher wealth inequality. This disparity is evident in countries like France, Mexico, Mainland China, Hong Kong, Taiwan, the U.S., Brazil, and the United Arab Emirates, where the difference between average and median wealth is significantly high.
One of the unexpected findings in the report is the prediction of a significant horizontal wealth transfer to spouses. Approximately $9 trillion of the estimated $83 trillion wealth transfer expected in the next two decades is projected to be passed on intra-generationally or horizontally, primarily to spouses. Due to factors like average life expectancy and age gaps within couples, a considerable portion of this wealth transfer is likely to benefit women. This horizontal wealth transfer trend challenges traditional notions of intergenerational wealth transfer and underscores the changing dynamics of wealth distribution within families.
The 2024 Global Wealth Report provides valuable insights into the evolving landscape of global wealth distribution and millionaire growth patterns. While countries like Taiwan are poised for significant millionaire expansion, others like the U.K. face challenges that could lead to a decline in wealthy individuals. The report’s analysis of wealth mobility, inequality trends, and horizontal wealth transfers underscores the complexities of wealth distribution dynamics in the contemporary economic landscape. As the world economy continues to evolve, understanding these trends is crucial for policymakers, economists, and individuals seeking to navigate the changing terrain of global wealth.