The Great Wealth Exodus: Why the UK Must Act to Retain Its Millionaires
In a startling turn of events, the UK is poised to experience the largest exodus of millionaires in recorded history, a trend that could have profound implications for the country’s economic competitiveness and stability. According to the Henley Private Wealth Migration Report 2025, a staggering 16,500 millionaires are expected to leave the UK this year, surpassing any other country in terms of net outflow of high-net-worth individuals.
Historical Context and Current Trends
For decades, the UK has been a magnet for the world’s wealthiest individuals, attracting them with its stable economic environment, favourable tax policies, and high standard of living. However, this narrative is rapidly changing. The UK’s appeal is waning, and the country is now facing a significant brain and wealth drain. This shift is not merely a blip on the radar but a culmination of several key policy changes and economic uncertainties.
The closure of the Tier 1 Investor Visa in February 2022 marked a significant turning point, as it eliminated a crucial entry route for affluent foreign nationals. Further, the overhaul of the non-domicile tax regime by the Conservative government in March 2024, followed by Labour’s announcement of changes to inheritance tax rules in October, has accelerated this trend. These policy shifts have pushed net millionaire departures into double digits for the first time, with the UK losing 9,500 millionaires in 2024 and a projected 16,500 in 2025.
Economic Implications
The economic consequences of this exodus are far-reaching and potentially devastating. The departing millionaires collectively hold an estimated £66 billion in liquid, investable assets. This capital drain compounds the economic challenges the UK has faced since Brexit, further eroding its global standing as a hub for wealth and investment.
The loss of these high-net-worth individuals not only reduces the tax base but also diminishes the pool of potential investors and entrepreneurs who could contribute to economic growth. Moreover, the perception that greater opportunity, freedom, and stability lie elsewhere is a stark warning sign for the UK’s economic competitiveness. As Juerg Steffen, CEO of Henley and Partners, noted, this is not just about changes to the tax regime. It reflects a deepening perception among the wealthy that greater opportunity, freedom, and stability lie elsewhere.
Migration Destinations and Alternatives
Where are these millionaires heading? The top destinations for these relocating high-net-worth individuals include the United Arab Emirates, the United States, Italy, and Switzerland. These countries are attracting wealth with more favourable tax environments, stable economies, and clear pathways for residency and citizenship.
Interestingly, despite the outbound wave, the UK remains a desirable destination for certain groups, such as Americans disenchanted with their current political climate. However, without a viable entry pathway, the UK is unable to offset the outflow, leading to a growing imbalance between incoming and outgoing wealth.
A Call to Action
To reverse this trend, the UK government must take immediate and decisive action. Here are a few key steps that could be considered.
Revisit Tax Policies
The government should reassess the recent tax changes and consider reforms that make the UK more attractive to high-net-worth individuals. This could include revisiting the non-domicile tax regime and inheritance tax rules to ensure they are competitive with other nations.
Restore Entry Pathways
Reinstating or creating alternative entry routes similar to the Tier 1 Investor Visa could help attract new affluent individuals to the UK.
Economic Stability and Confidence
Addressing economic uncertainties and restoring confidence in the UK’s economic stability is crucial. This involves clear and consistent economic policies that reassure investors and high-net-worth individuals.
Promote Investment Opportunities
Highlighting and promoting investment opportunities within the UK can attract new capital and talent. This could include initiatives to support start-ups, innovation hubs, and infrastructure projects.
In conclusion, the exodus of millionaires from the UK is a wake-up call that demands urgent attention. The government must act swiftly to reverse this trend by creating a more favourable environment for wealth and investment. By doing so, the UK can reclaim its status as a global hub for the wealthy and ensure a more stable and prosperous economic future.
At Cutts and Co Accountancy, we understand the complexities of wealth management and the impact of policy changes on high-net-worth individuals. We are committed to providing expert advice and guidance to help our clients navigate these challenging times and make informed decisions about their financial futures.
If you are concerned about the implications of these changes or need advice on how to manage your wealth effectively, please do not hesitate to contact us.
