UK Set to Suffer Bigger Net Exodus of Millionaires than Russia in 2023
LONDON, June 13, 2023 /PRNewswire/ -- The UK is expected to see a net outflow of 3,200 high-net-worth individuals (HNWIs) in 2023 — higher than the projected 3,000 net loss for Russia, according to the Henley Private Wealth Migration Report 2023.This will make the UK the third-biggest loser of millionaires globally after China (net loss of 13,500) and India (net loss of 6,500). Perhaps most notably, the UK's anticipated HNWI flight is double that of last year, when it saw a net exodus of 1,600 millionaires.
The report by investment migration advisory firm Henley & Partners features the latest net inflows and outflows of dollar millionaires (namely, the difference between the number of HNWIs with investable wealth of USD 1 million or more who relocate to, and emigrate from, a country) as projected by global wealth intelligence firm New World Wealth. The figures focus only on HNWIs who have moved — namely, who stay in their new country more than six months a year. Note: All HNWI figures are rounded to the nearest 100.
"Down Under" back on top
Australia is expected to attract the highest net inflow of HNWIs in 2023 at 5,200, and although the UAE drops into 2nd place following its record-breaking influx in 2022, it is still expected to enjoy an impressive net arrival of 4,500 new millionaires this year. Singapore ranks 3rd with a net inflow of 3,200 HNWIs, its highest on record, followed the US with an expected net influx of 2,100 millionaires.
Switzerland (net inflow of 1,800) and Canada (1,600) are in 5th and 6th place, respectively, with Greece (1,200), France (1,000 — double last year's net intake of 500 millionaires), Portugal (800), and New Zealand (700) all making it onto this year's Top 10 list for net HNWI inflows. Israel is predicted to tumble out of the Top 10 with its net inflow of millionaires set to almost halve to just 600 compared to 1,100 in 2022.
Dr. Juerg Steffen, CEO of Henley & Partners, says there's been a steady growth in millionaire migration over the past decade, with global figures for 2023 and 2024 expected to be 122,000 and 128,000, respectively. "In general, wealth migration trends look set to revert to pre-pandemic patterns this year, with the notable exceptions of former top wealth magnets, the UK and the US."
Brexit a bad bet for Britain
The UK's peak net outflow year was 2017, following the Brexit referendum in 2016. Prior to this, the country enjoyed net positive inflows of HNWIs. While net losses dropped slightly between 2017 and 2019, the 2023 forecast indicates a far more significant millionaire exit is currently underway.
Prof. Trevor Williams, former Chief Economist at Lloyds Bank Commercial, says "whatever one may think about the merits of Brexit, this cohort is voting with its feet. Coupled with the policy change to remove permanent non-domiciled taxpayer status, Brexit has made the UK less hospitable and welcoming to HNWIs." Sunita Singh-Dalal of Hourani & Partners agrees that "the recent unsettling British 'Non-Dom debate' triggered by unprecedented political volatility, coupled with rising debt, a dysfunctional healthcare system, high crime rates, and a general sense of lingering malaise, has clearly tarnished the lustre of London."
The appeal of another financial giant, the US, is also dwindling fast. America is notably less popular among migrating millionaires than pre-Covid, owing in part to the threat of higher taxes. The country still attracts more HNWIs than it loses to emigration, with a net inflow of 2,100 projected for 2023, although this is a staggering drop from 2019 levels, which saw a net inflow of 10,800 millionaires.
The other big losers in 2023
As it has for the past decade, China continues to lose the largest numbers of dollar millionaires each year to migration. Andrew Amoils, Head of Research at New World Wealth, explains that "general wealth growth in China has been slowing over the past few years, which means that the recent outflows could be more damaging than usual." Although the second-biggest loser globally, India's net exit numbers are predicted to drop to 6,500 in 2023 compared to last year (7,500) and as Amoils points out, "these outflows are not particularly concerning as India produces far more new millionaires than it loses to migration."
The UK (3,200) and Russia (3000 vs 8,500 in 2022 following its invasion of Ukraine) sit in 3rd and 4th place respectively, with Brazil (1,200), Hong Kong (SAR China) (1,000 — less than half the actual net outflow in 2022), South Korea (800 — double the net outflow in 2022), Mexico (700), South Africa (500), and Japan (300 compared to last year's net loss of 100) making up the rest of the Top 10 biggest millionaire losers forecast for 2023.
Award-winning journalist Misha Glenny says the lessons for those who hope to attract HNWIs are clear. "Political stability is the key metric, together with low taxation regimes and personal freedom. Until the Russo–Ukrainian war comes to end, both countries will continue to export HNWIs, and this will remain the single largest driver of relocation. But with elections due in many key Western countries in the next 18 months, other HNWIs may wait until their outcome, notably in the US and the UK, before making their choice."
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