Wealth in the UK: Sizing the Market Opportunity 2017

  • ID: 4142929
  • Report
  • Region: United Kingdom, Great Britain
  • 58 pages
  • GlobalData
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FEATURED COMPANIES

  • EY
  • GlaxoSmithKline
  • Kraft-Heinz
  • London Stock Exchange
  • Rolls Royce
  • Unilever
  • MORE
Wealth in the UK: Sizing the Market Opportunity 2017

Summary:

"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 The 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.
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Note: Product cover images may vary from those shown
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FEATURED COMPANIES

  • EY
  • GlaxoSmithKline
  • Kraft-Heinz
  • London Stock Exchange
  • Rolls Royce
  • Unilever
  • MORE
EXECUTIVE SUMMARY
1.1. Growth in the UK will be muted after a strong 2016
1.2. Key findings
1.3. Critical success factors
2. SIZING AND FORECASTING THE UK WEALTH MARKET
2.1. The UK has a major offshore business
2.2. Growth in the onshore market is driven by the HNW segment
2.2.1. The UK affluent market remains the fourth largest in the world
2.2.2. Affluent individuals represent 28.9% of the adult population
2.2.3. The affluent population holds 91.8% of retail liquid assets, with the wealthiest set to record the strongest growth
2.2.4. The UK's onshore wealth is concentrated in London and the South East
3. DRIVERS OF GROWTH IN THE UK WEALTH MARKET
3.1. 2016 saw the highest growth in retail savings and investments since the financial crisis
3.1.1. The total value of savings and investments in the UK will exceed £3tn in 2018
3.1.2. Deposits account for 48.4% of the total market
3.1.3. Mutual funds will continue to drive growth
3.2. Retail deposits have outperformed GDP
3.2.1. After a strong 2016, shrinking real rates of return will limit future growth
3.2.2. Net inflows have been the primary driver for standard deposit growth
3.2.3. UK savers prefer instant access accounts to time deposits
3.3. Bonds account for only a fraction of UK retail savings, and inflation will limit future growth
3.4. Uncertainty regarding future stock market performance is restraining equity holdings but boosting mutual funds
3.4.1. Fueled by the weak pound, the FTSE 100 reached record levels in 2016
3.4.2. The performance of the stock market has had a direct impact on equities and mutual funds
3.4.3. Mutual funds are relatively well diversified, which shields performance from the vagaries of the stock market
4. HNW INVESTMENT PREFERENCES
4.1. UK HNW individuals show a strong preference for liquid investments
4.1.1. UK HNW investors have switched from direct property to ETFs
4.1.2. The wealthiest UK individuals are once again turning their attention to hedge funds
4.2. In addition to their onshore portfolios, UK HNW individuals hold 22.7% of their wealth offshore
4.2.1. Tax efficiency remains the number one motivation for offshore investment
4.2.2. The Isle of Man and Ireland are the primary booking centers for UK HNW offshore wealth
5. APPENDIX
5.1. Abbreviations and acronyms
5.2. Supplementary data
5.3. Definitions
5.3.1. Affluent
5.3.2. Domicile
5.3.3. DTC
5.3.4. Exchange of information
5.3.5. FATCA
5.3.6. HNW
5.3.7. Liquid assets
5.3.8. Mass affluent
5.3.9. Mass market
5.3.10. Net inflows
5.3.11. Onshore
5.3.12. Performance/interest growth
5.3.13. Residency
5.3.14. TIEAs
5.4. Methodology
5.4.1. GlobalData’s 2016 Global Wealth Managers Survey
5.4.2. Global Wealth Model methodology
5.4.3. UK Retail Savings and Investments Methodology
5.4.4. Exchange rates
5.5. Bibliography
5.6. Further reading

List of Tables
Table 1: UK Income tax rates
Table 2: Dividend tax rates
Table 3: Capital gains tax rates for individuals
Table 4: Stamp Duty Land Tax rates
Table 5: Land and buildings transaction tax rates in Scotland
Table 6: Annual tax on enveloped dwellings rates
Table 7: Total retail resident and non-resident deposits (£bn), 2006-16
Table 8: Total retail resident and non-resident deposits (£bn), 2006-16
Table 9: Total UK adult population by pound sterling asset bands (000s), 2010-15
Table 10: Forecast total UK adult population by pound sterling asset bands (000s), 2016e-20f
Table 11: Total UK adult population by US dollar asset bands (000s), 2009-15
Table 12: Forecast total UK adult population by US dollar asset bands (000s), 2016e-20f
Table 13: Total UK onshore liquid wealth by asset band (£bn), 2010-15
Table 14: Forecast total UK onshore liquid wealth by asset band (£bn), 2016e-20f
Table 15: Total UK onshore liquid wealth by asset band ($bn), 2010-15
Table 16: Forecast total UK onshore liquid wealth by asset band ($bn), 2016e-20f
Table 17: Total UK onshore liquid assets by region and affluent segment (£bn), 2016
Table 18: UK retail savings and investments by asset class ($m), 2010-15
Table 19: Forecast UK retail savings and investments by asset class ($m), 2016e-20f
Table 20: Net inflows and interest performance of UK retail deposits excluding cash ISAs (£m), 2007-16
Table 21: Net inflows and performance gains of UK retail equities (£m), 2007-16
Table 22: Net inflows and performance gains of UK mutual funds (unit trusts, OEICs, and investment trusts) (£m), 2007-16
Table 23: Pound sterling-US dollar exchange rate, December 31, 2015 and December 31, 2016

List of Figures
Figure 1: Non-resident deposits accounted for 41.7% of the UK retail deposit market in 2016
Figure 2: HNW individuals account for 0.69% of the UK adult population, making the big opportunity mass affluent-focused
Figure 3: The affluent population hold 91.8% of retail liquid assets in the UK
Figure 4: London and the South East account for 29.2% of onshore affluent liquid assets in the UK
Figure 5: The value of UK retail savings and investments increased by more than 8% in 2016
Figure 6: Deposits account for half of the UK retail savings and investments market
Figure 7: Mutual funds will be growing faster than any other savings or investment products
Figure 8: Retail deposits have shown strong growth, outperforming GDP
Figure 9: 2016 saw record-high inflows into deposits as savers shifted from ISA accounts to regular bank products
Figure 10: Higher inflation will limit growth in direct retail bond investments
Figure 11: As of December 2016, the oil and gas industry is the top industry in the FTSE 100 index
Figure 12: Retail mutual fund and equity investments correlate strongly with the performance of the UK stock market
Figure 13: Stock market volatility has had a negative effect on direct retail equity investments
Figure 14: UK mutual funds have been continuously attracting new money
Figure 15: Mutual funds in the UK are predominantly invested in equities
Figure 16: Outside traditional assets, property ETFs and hedge funds are the most notable components of UK HNW portfolios
Figure 17: UK HNW individuals hold 22.7% of their portfolios offshore
Figure 18: Tax is the key driver of offshore investment among UK HNW individuals
Figure 19: The Isle of Man and Ireland combined host almost half of UK HNW offshore wealth
Figure 20: The UK has DTCs and TIEAs with a number of global offshore centers
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  • London Stock Exchange
  • Kraft-Heinz
  • Unilever
  • GlaxoSmithKline
  • Rolls Royce
  • EY
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown
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