Confidence among high-net-worth individuals in the UK economy has increased but still remains below pre-Budget levels, with fears over tax reform and inflation continuing to weigh heavily, according to the latest Saltus Wealth Index Report.
The bi-annual survey of 2,000 people with investible assets of over £250,000 showed that confidence in the UK economy and their own wealth has risen from 58.2% to 64.7%.
Confidence in the economic outlook has increased from 48% in the last report to 66%, driven by strong market performance following the Trump tariff trough. However, it remains sharply below the 84% recorded a year ago, before Labour’s first Budget.
One in four (24%) high net worth individuals cite ‘the economy going into recession’ as their biggest worry and confidence among older individuals remains particularly flat with only 15% of over-55s holding a positive economic outlook.
Amid mounting speculation that the Chancellor could target housing, wealth and inheritance tax in the upcoming Budget, tax remains a top concern for wealthy individuals, Saltus said. More than three quarters (78%) expect tax rises within the next 12 months and almost half (46%) see tax changes as the single biggest risk to their wealth, second only to inflation (58%).
Four in 10 (40%) say they anticipate higher levels of income tax, despite the fact nearly a quarter (24%) believe higher rates of income tax are already ‘unreasonably high’ and a key barrier to economic growth.
Employers’ national insurance and reduced pension contribution relief are also expected targets, with 40% saying they think all three could see reforms in the next 12 months.
The majority of respondents also think that capital gains tax will be targeted, with 46% anticipating a rise and 34% expecting further rate freezes. A similar number (36%) also expect inheritance tax rates to increase and 47% expect the threshold at which it is paid to remain frozen.
Mike Stimpson, partner at Saltus, said: “Confidence in the UK economy is showing a degree of recovery amongst high-net-worth individuals, up from the lows we saw in January, but this is tempered by concerns over future tax changes and what the Labour Government will do next.
“Whether it’s capital gains tax, income tax or inheritance tax, HNWIs are braced for further changes at the Autumn Budget given the Chancellor’s limited fiscal room for manoeuvre.
“This cohort are the wealth creators, investors and employers who drive economic growth – if their confidence is undermined by continual uncertainty, that has consequences for everyone.”
Saltus said the vast majority of high-net-worth individuals are already taking steps to mitigate the risk. A third (33%) are considering strategies to protect their pensions from inheritance tax, while 30% are reviewing retirement savings or income in anticipation of legislative reform.
Meanwhile, more than a third (35%) have made formal pension beneficiary nominations, a similar number (34%) have set up trusts and 14% have placed conditions on gifts and inheritance.
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