The 2024 Global Wealth Report from UBS paints an interesting picture of the future of global wealth distribution and the number of millionaires worldwide. The report indicates that the number of adults owning $1 million or more is expected to grow in 52 out of 56 developed and developing economies surveyed between 2023 and 2028. This projected growth will be significantly driven by countries such as Taiwan, Turkey, Kazakhstan, Indonesia, and Japan. However, the U.K. stands out as a stark outlier in this trend, with the forecast predicting a 17% decline in the number of millionaires in the country.
Paul Donovan, the chief economist at UBS Global Wealth Management, highlighted some key factors contributing to the decline of millionaires in the U.K. He mentioned that the country currently has the third-highest number of dollar millionaires in the world, a status he believes is not justified based on the country’s economic performance. Despite the growth expected in countries like France and Italy, the U.K. is facing challenges such as capital outflows due to shifts in wealth distribution and changes in global economic dynamics. Factors such as the introduction of sanctions against Russia and changes in tax regimes have also played a role in the projected decline of millionaires in the U.K.
The UBS report also sheds light on the development of wealth inequality on a global scale. While wealth mobility, the ability of individuals to move up the wealth ladder, is expected to improve overall, there are concerns about growing clusters of high wealth at the top of major economies. The report suggests that in many countries, a rise in average wealth may mask a sharp fall in median wealth, indicating higher levels of wealth concentration among the richest individuals. This disparity is particularly pronounced in countries like France, Mexico, mainland China, Hong Kong, Taiwan, the U.S., Brazil, and the United Arab Emirates.
One of the interesting findings of the UBS report is the projection of wealth transfer not just between generations but also within generations, particularly to spouses. The report estimates that of the $83 trillion expected to be passed on over the next two decades, $9 trillion will be transferred horizontally to spouses. This trend is expected to benefit women significantly, given average life expectancy and age gaps within couples. As a result, spouses are anticipated to inherit and own significant wealth for a brief period before passing it on further.
The 2024 UBS Global Wealth Report provides valuable insights into the future of global wealth distribution, the rise of millionaires in various countries, challenges faced by economies like the U.K., implications of wealth inequality, and the dynamics of wealth transfer within and between generations. While some countries are projected to see significant growth in the number of millionaires, others are facing declines due to a variety of factors. Understanding these trends and their implications is crucial for policymakers, investors, and individuals seeking to navigate the evolving landscape of global wealth.