Britain suffered one of the sharpest declines in household wealth among major economies in 2024, in another blow to Chancellor Rachel Reeves as she focuses on growing the UK economy.
The closely watched UBS’s latest Global Wealth Report showed that average household wealth in the UK fell by 3.6% last year, the second-largest drop among major economies, outpaced only by Turkey, where a deep economic crisis saw average wealth tumble by over 14% amid runaway inflation and soaring interest rates. The reversal marks a stark contrast to the steady growth of more than 6% in UK household wealth seen since the start of the decade, and comes as the country faces mounting challenges in retaining its wealthiest residents and reviving its sluggish economy.
UBS’s Michel Frey, head of UK high net worth clients, attributed the downturn to a combination of lacklustre performance in the London stock market and stagnating house prices.
He told City AM: “Average real-term wealth per adult in the United Kingdom fell in 2024 because living-cost pressures and rising interest rates moved faster than either house prices or most financial markets. Naturally, this dented people’s ability to build or retain wealth.”
While the wealth decline was most pronounced at the top end of the spectrum, with the richest households bearing the brunt, median household assets in the UK actually grew by more than 5%, suggesting that losses were concentrated among the wealthiest.
The exodus of affluent individuals ramped up last year, partly driven by Rachel Reeves’s policy changes, such as the abolition of non-dom tax status and fears of potential new wealth taxes.
The UK’s performance stands in stark contrast to America, where household wealth surged by 11% in 2024, buoyed by robust financial markets and a booming economy.
The US added more than 1,000 millionaires per day, as the S&P 500 soared over 25% and the economy grew by 2.8%.
