The UK is facing the prospect of losing the highest proportion of millionaires in the world within the next few years, according to a new report by the Adam Smith Institute (ASI).
The think tank warns that the share of the British population who are millionaires is expected to decline by a staggering 20% by 2028, with serious implications for the economy.
Currently, 4.55% of British residents hold millionaire status. However, this figure is projected to drop to 3.62% over the course of this parliament, signalling a potential exodus of wealth-creators from the UK. The ASI’s analysis suggests that this downturn could have profound consequences for public finances and investment in the wider economy, especially as millionaires are responsible for paying a significant share of taxes—particularly income tax, which is the UK’s largest source of revenue.
The departure of these individuals is expected to outpace even China and Russia in terms of the proportion of millionaires lost, raising alarm bells about the UK’s ability to retain high-net-worth individuals (HNWIs) and foster a favourable environment for business and prosperity.
Why Are Millionaires Leaving?
The report attributes this projected mass exodus to a range of factors, including increased taxation, threats of further tax hikes, and the potential abolition of the non-dom tax regime under Labour. Furthermore, the study points to an increasingly hostile culture towards wealth-creators in the UK, which has made it less attractive for millionaires to stay.
According to the ASI’s findings, such a shift will not only result in a direct loss of tax revenue but also reduce investment in the broader economy, exacerbating the UK’s already challenging economic outlook. The top 1% of earners currently contribute nearly 30% of income tax revenue, a significant loss if they were to leave the country.
Calls for Reform
Former Chancellor of the Exchequer Nadhim Zahawi has warned that this trend reflects a “vote of no confidence” in the UK’s current tax and regulatory environment. Zahawi urged the government to rule out any further anti-business measures in the upcoming Autumn Budget, set for October 30th.
“These individuals are often entrepreneurs and business owners. Their exit won’t just reduce necessary funds for public services—it will decrease investment in the wider economy too,” Zahawi said. He further advocated for abolishing anti-wealth taxes, including those targeting non-doms, to make Britain a more attractive destination for global millionaires.
Proposals to Reverse the Trend
The Adam Smith Institute has proposed several measures to reverse this alarming trend, including the introduction of an Italian-style annual flat fee of £150,000 for non-doms. If all current non-doms opted into such a scheme, it could raise £12.45 billion annually for the Treasury, while also making the UK more competitive in attracting HNWIs from around the world.
Maxwell Marlow, Director of Research at the Adam Smith Institute and co-author of the report, echoed Zahawi’s concerns. “This is a wake-up call to the Government,” Marlow said. “The more millionaires who leave, the greater the damage to the UK economy.”
He added that the trend was not irreversible, urging a comprehensive review of the UK’s tax policies toward wealth-creators to encourage them to remain in the country and invest.
Looking Ahead
The report paints a stark picture of the UK’s economic future if current policies continue unchecked. With millionaire departures on the rise and an increasingly hostile environment for wealth-creators, the government faces mounting pressure to rethink its approach to taxation and economic growth.
Whether the Chancellor will take these warnings into account in the upcoming Budget remains to be seen, but one thing is clear: the UK cannot afford to ignore the flight of its wealthiest citizens.
As the Adam Smith Institute report warns, this could be just the beginning of a broader economic crisis if immediate action is not taken to retain and attract high-net-worth individuals.
Source: Adam Smith Institute
