A record number of millionaires could leave the United Kingdom this year as political turmoil and the potential for higher taxes under a future Labour government reduce the appeal of what was once among the top destinations for the rich.
As many as 9,500 people with at least $1 million in liquid, investable assets, will leave the country, more than double the number that left in 2023, according to provisional estimates contained in a report Tuesday by migration advisers Henley & Partners.
“These figures reflect a steady accumulation of factors detracting from the UK’s appeal to high-net-worth individuals,” Hannah White, CEO of the Institute for Government, wrote in the report. “The hangover from Brexit continues to be felt, with the City of London no longer seen as the financial center of the world.”
The report is based on data on 150,000 high-net-worth individuals (HNWIs) tracked by investment firm New World Wealth. The firm only counts people who stay in their new country more than half of the year, and focuses primarily on company founders, chairs, CEOs, presidents, directors and managing partners.
The continuing exodus from the UK — 16,500 millionaires left between 2017 and 2023 — is part of a global mass migration of the rich that appears to be accelerating. The Henley Private Wealth Migration report found that 128,000 millionaires are set to relocate this year, beating last year’s record by 8,000.
“As the world grapples with a perfect storm of geopolitical tensions, economic uncertainty and social upheaval, millionaires are voting with their feet in record numbers,” Dominic Volek, head of private clients at Henley & Partners, said in a press release.
Of the 15 places with most resident millionaires, the UK is suffering more than most — only China will lose more HNWIs (15,200) in 2024 — and it’s one of just three locations, alongside Japan and Hong Kong, to have seen a net loss in the decade since 2013, according to the report. By contrast, the ranks of the wealthy have grown in the US, Canada, Australia, Germany and France over the same period.
The impact of Brexit, which ended the free movement of people between the UK and the European Union as well as raising new barriers to trade and investment, and other economic shocks such as the war in Ukraine and the ensuing energy price spike, has been compounded by a period of unprecedented political uncertainty.
The UK has had five prime ministers since 2010, including the 45-day tenure of Liz Truss in 2022, when her plan to jack up government borrowing to slash taxes sent the pound crashing to a record low against the dollar and forced the Bank of England to intervene to prevent a financial crisis.
Such instability has made it much harder for policymakers to address the country’s anemic economic growth and foster a better climate for investment.
Now there’s a new risk on the horizon. Keir Starmer’s Labour Party, which is leading Prime Minister Rishi Sunak’s Conservatives by a margin of about 20% in opinion polls, has gone out of its way to woo business and investors, and to promise economic stability and stronger growth if it wins the upcoming election on July 4.
Starmer and his finance spokesperson Rachel Reeves, who previously worked at the Bank of England, have promised not to increase income tax or sales tax — and to stick with fiscal rules adopted by Sunak’s government.
But Labour is committed to targeted tax increases that could hit the rich. It wants to remove a 20% tax break from private schools to fund new teachers in the state sector, close remaining loopholes that allow so-called non-dom residents to protect some of their foreign earnings from tax and raise more money from private equity firms.
“The outflow of high-net-worth individuals already generated by the economic and political context is now being accelerated by policy decisions ahead of the election,” said White.
Still, one very rich couple will apparently be staying, whatever the result on July 4. Sunak, a millionaire former hedge fund manager, and his wife Akshata Murty — the daughter of an Indian tech billionaire — are worth £651 million ($826 million), according to The Sunday Times Rich List, making them richer than King Charles.
Sunak said last week he would serve a full term if re-elected as member of parliament in his northern England constituency, even if his party is kicked out of government.
