Back to reports
0
0

Wealth in the UK: Sizing the Market Opportunity 2017

Pages: 58 Published: March 30, 2017 Report Code: GDF0007CI

Add to Wishlist
Select Item

"Wealth in the UK: Sizing the Market Opportunity 2017" analyzes the UK's wealth and retail savings and investments markets, with a focus on the HNW segment. The report is based on our proprietary datasets.

Despite the surprising result of the Brexit referendum and a slowing economy, the UK’s liquid assets grew by over 8% in 2016, the highest growth rate since the end of the financial crisis. Growth continues to be driven mainly by mutual funds, which performed well despite the volatility, as fund managers were able to capitalize on the opportunities provided by the UK stock market. With low interest rates, UK investors may be showing growing demand for well-performing funds. However, as the country’s economy faces the challenges of lower GDP expansion and growing inflation, future growth will remain muted. Wealth managers will still be able to find opportunities to grow their business, with demand for tax and estate planning advice remaining high as the government continues to fiddle with tax or pensions regulations.

Specifically, the report –
– sizes the affluent market (both by the number of individuals and value of their liquid assets) using GlobalData’s proprietary datasets
– analyzes which asset classes are favored by UK investors and how their preferences impact the growth of the total savings and investments market
– examines HNW clients’ attitudes towards non-liquid investments, such as property and commodities
– identifies key drivers and booking centers for offshore investments

Scope

– Affluent individuals represent less than 29% of the UK population but hold 91.8% of the UK’s liquid assets.

– UK wealth is concentrated mainly in London and the South East, and the unequal wealth distribution is unlikely to change during the period of economic slowdown.

– 48.4% of UK savings are held in deposits (mostly in instant access accounts), but the solid performance of mutual funds has been attracting inflows to this asset class.

– Despite holding 11% of their investment portfolios in commodities, property, and alternatives, the UK’s wealthiest individuals show a strong preference for liquid products.

– Tax efficiency remains the main driver for HNW individuals opting to offshore wealth, with the Isle of Man and Ireland being the preferred booking centers.

Reasons to Buy

– Benchmark your share of the UK wealth market against the current market size.

– Forecast your future growth prospects using our projections for the market to 2020.

– Identify your most promising client segment by analyzing the penetration of affluent individuals in the UK – both at country and regional level.

– Evaluate your HNW proposition by understanding how the ever-changing UK tax system affects your HNW clients.

– Review your offshore strategy by learning about HNW motivations for offshore investments and their preferred booking centers.

Key Players

London Stock Exchange
Kraft-Heinz
Unilever
GlaxoSmithKline
Rolls Royce
EY

Table of Contents

Table of Contents

EXECUTIVE SUMMARY 2

1.1. Growth in the UK will be muted after a strong 2016 2

1.2. Key findings 2

1.3. Critical success factors 2

2. SIZING AND FORECASTING THE UK WEALTH MARKET 8

2.1. The UK has a major offshore business 8

2.2. Growth in the onshore market is driven by the HNW segment 9

2.2.1. The UK affluent market remains the fourth largest in the world 9

2.2.2. Affluent individuals represent

28.9% of the adult population 10

2.2.3. The affluent population holds

91.8% of retail liquid assets, with the wealthiest set to record the strongest growth 11

2.2.4. The UK's onshore wealth is concentrated in London and the South East 13

3. DRIVERS OF GROWTH IN THE UK WEALTH MARKET 14

3.1. 2016 saw the highest growth in retail savings and investments since the financial crisis 14

3.1.1. The total value of savings and investments in the UK will exceed £3tn in 2018 14

3.1.2. Deposits account for

48.4% of the total market 15

3.1.3. Mutual funds will continue to drive growth 17

3.2. Retail deposits have outperformed GDP 18

3.2.1. After a strong 2016, shrinking real rates of return will limit future growth 18

3.2.2. Net inflows have been the primary driver for standard deposit growth 19

3.2.3. UK savers prefer instant access accounts to time deposits 19

3.3. Bonds account for only a fraction of UK retail savings, and inflation will limit future growth 20

3.4. Uncertainty regarding future stock market performance is restraining equity holdings but boosting mutual funds 22

3.4.1. Fueled by the weak pound, the FTSE 100 reached record levels in 2016 22

3.4.2. The performance of the stock market has had a direct impact on equities and mutual funds 23

3.4.3. Mutual funds are relatively well diversified, which shields performance from the vagaries of the stock market 25

4. HNW INVESTMENT PREFERENCES 27

4.1. UK HNW individuals show a strong preference for liquid investments 27

4.1.1. UK HNW investors have switched from direct property to ETFs 27

4.1.2. The wealthiest UK individuals are once again turning their attention to hedge funds 27

4.2. In addition to their onshore portfolios, UK HNW individuals hold

22.7% of their wealth offshore 28

4.2.1. Tax efficiency remains the number one motivation for offshore investment 29

4.2.2. The Isle of Man and Ireland are the primary booking centers for UK HNW offshore wealth 34

5. APPENDIX 38

5.1. Abbreviations and acronyms 38

5.2. Supplementary data 38

5.3. Definitions 49

5.3.1. Affluent 49

5.3.2. Domicile 49

5.3.3. DTC 49

5.3.4. Exchange of information 49

5.3.5. FATCA 50

5.3.6. HNW 50

5.3.7. Liquid assets 50

5.3.8. Mass affluent 51

5.3.9. Mass market 51

5.3.10. Net inflows 51

5.3.11. Onshore 51

5.3.12. Performance/interest growth 52

5.3.13. Residency 52

5.3.14. TIEAs 52

5.4. Methodology 52

5.4.1. GlobalData’s 2016 Global Wealth Managers Survey 52

5.4.2. Global Wealth Model methodology 53

5.4.3. UK Retail Savings and Investments Methodology 53

5.4.4. Exchange rates 54

5.5. Bibliography 54

5.6. Further reading 56

List of Tables

List of Tables

Table 1: UK Income tax rates 31

Table 2: Dividend tax rates 32

Table 3: Capital gains tax rates for individuals 32

Table 4: Stamp Duty Land Tax rates 33

Table 5: Land and buildings transaction tax rates in Scotland 33

Table 6: Annual tax on enveloped dwellings rates 34

Table 7: Total retail resident and non-resident deposits (£bn), 2006-16 38

Table 8: Total retail resident and non-resident deposits (£bn), 2006-16 38

Table 9: Total UK adult population by pound sterling asset bands (000s), 2010-15 39

Table 10: Forecast total UK adult population by pound sterling asset bands (000s), 2016e-20f 40

Table 11: Total UK adult population by US dollar asset bands (000s), 2009-15 41

Table 12: Forecast total UK adult population by US dollar asset bands (000s), 2016e-20f 42

Table 13: Total UK onshore liquid wealth by asset band (£bn), 2010-15 43

Table 14: Forecast total UK onshore liquid wealth by asset band (£bn), 2016e-20f 44

Table 15: Total UK onshore liquid wealth by asset band ($bn), 2010-15 45

Table 16: Forecast total UK onshore liquid wealth by asset band ($bn), 2016e-20f 46

Table 17: Total UK onshore liquid assets by region and affluent segment (£bn), 2016 47

Table 18: UK retail savings and investments by asset class ($m), 2010-15 47

Table 19: Forecast UK retail savings and investments by asset class ($m), 2016e-20f 48

Table 20: Net inflows and interest performance of UK retail deposits excluding cash ISAs (£m), 2007-16 48

Table 21: Net inflows and performance gains of UK retail equities (£m), 2007-16 48

Table 22: Net inflows and performance gains of UK mutual funds (unit trusts, OEICs, and investment trusts) (£m), 2007-16 48

Table 23: Pound sterling-US dollar exchange rate, December 31, 2015 and December 31, 2016 54

List of Figures

List of Figures

Figure 1: Non-resident deposits accounted for 41.7% of the UK retail deposit market in 2016 8

Figure 2: HNW individuals account for 0.69% of the UK adult population, making the big opportunity mass affluent-focused 10

Figure 3: The affluent population hold 91.8% of retail liquid assets in the UK 12

Figure 4: London and the South East account for 29.2% of onshore affluent liquid assets in the UK 13

Figure 5: The value of UK retail savings and investments increased by more than 8% in 2016 15

Figure 6: Deposits account for half of the UK retail savings and investments market 16

Figure 7: Mutual funds will be growing faster than any other savings or investment products 17

Figure 8: Retail deposits have shown strong growth, outperforming GDP 18

Figure 9: 2016 saw record-high inflows into deposits as savers shifted from ISA accounts to regular bank products 20

Figure 10: Higher inflation will limit growth in direct retail bond investments 21

Figure 11: As of December 2016, the oil and gas industry is the top industry in the FTSE 100 index 22

Figure 12: Retail mutual fund and equity investments correlate strongly with the performance of the UK stock market 23

Figure 13: Stock market volatility has had a negative effect on direct retail equity investments 24

Figure 14: UK mutual funds have been continuously attracting new money 25

Figure 15: Mutual funds in the UK are predominantly invested in equities 26

Figure 16: Outside traditional assets, property ETFs and hedge funds are the most notable components of UK HNW portfolios 28

Figure 17: UK HNW individuals hold 22.7% of their portfolios offshore 29

Figure 18: Tax is the key driver of offshore investment among UK HNW individuals 30

Figure 19: The Isle of Man and Ireland combined host almost half of UK HNW offshore wealth 35

Figure 20: The UK has DTCs and TIEAs with a number of global offshore centers 36
Buy Now

Add to Basket
$3,450

Can be used by individual purchaser only

Most Popular
$6,900

Can be shared by unlimited users within one corporate location e.g. a regional office

$10,350

Can be shared globally by unlimited users within the purchasing corporation e.g. all employees of a single company

Get in touch to find out about our multi-purchase discounts

reportstore@globaldata.com
Tel +44 (0) 20 7947 2960

Every customer’s requirement is unique. We understand that and can customize the report basis your exact research requirements pertaining to market insights, innovation insights, strategy and planning, and competitive intelligence. You can also avail the option of purchasing stand-alone sections of the report or request for a country specific report.

Still undecided about purchasing this report?

Enquire Before Buying

Testimonial

“The GlobalData platform is our go-to tool for intelligence services. GlobalData provides an easy way to access comprehensive intelligence data around multiple sectors, which essentially makes it a one-for-all intelligence platform, for tendering and approaching customers.

GlobalData is very customer orientated, with a high degree of personalised services, which benefits everyday use. The highly detailed project intelligence and forecast reports can be utilised across multiple departments and workflow scopes, from operational to strategic level, and often support strategic decisions. GlobalData Analytics and visualisation solutions has contributed positively when preparing management presentations and strategic papers.”

Business Intelligence & Marketing Manager, SAL Heavy Lift

“COVID-19 has caused significant interference to our business and the COVID-19 intelligence from GlobalData has helped us reach better decisions around strategy. These two highlights have helped enormously to understand the projections into the future concerning our business units, we also utilise the project database to source new projects for Liebherr-Werk to use as an additional source to pitch for new business.”

Market Analyst & Management, Liebherr-Werk

Your daily news has saved me a lot of time and keeps me up-to-date with what is happening in the market, I like that you almost always have a link to the source origin. We also use your market data in our Strategic Business Process to support our business decisions. By having everything in one place on the Intelligence Center it has saved me a lot of time versus looking on different sources, the alert function also helps with this.

Head of Key Accounts, Saab AB

Having used several other market research companies, I find that GlobalData manages to provide that ‘difficult-to-get’ market data that others can’t, as well as very diverse and complete consumer surveys.

Marketing Intelligence Manager, Portugal Foods

Related reports

View more Financial Services reports
Financial Services
New
Cloud Computing in Banking - Thematic Intelligence
$1,950 | March 2023
Financial Services
New
JI Accident & Fire Insurance Company Limited in Japan
$0 | March 2023
Financial Services
New
Gig Economy in Insurance - Thematic Intelligence
$1,950 | March 2023