Financial News

Outrageous fortunes – how rich Brits are getting even richer

The very rich are getting richer, according to a new research looking at the fortunes of millionaires in Britain.

Those with £1 million or more managed to grow their wealth by 14% during 2011, those with £10 million and above grew theirs at twice this rate (28%) and those with a minimum of £100 million recorded a massive increase of 43%.

The figures come from a survey by research firm Ledbury.

Director James Lawson said:  “This represents the highest divergence in performance of the top and bottom ends of the wealthy population since Ledbury began its in-depth tracking in 2006, and underlines the current turbulence in wealth distribution.

Wealthy are getting wealthier

“At the outset of the financial crisis in 2007, many of the wealthy dropped down the wealth bands.  More specifically, the numbers and wealth of millionaires grew 10.7% and 0.2% respectively, while those worth more than £50 million saw their number and assets fall.

“By 2008, when the crisis had taken root, every wealth band above £1 million saw a drop in their fortunes, though it was felt more acutely by the ultra high net worth individuals where those worth over £100 million lost 33%.

“Most recently, we have seen a recovery in the fortunes of the existing wealthy, with those at the wealthier end of the spectrum growing much faster both in numbers and total net wealth. The contrast between the top end and the lower end is further exacerbated by the fact that there hasn’t been an influx of newly wealthy individuals into the ranks.”

What millionaires are thinking

The changes have altered the mix of wealthy individuals in the population, with wealthier people making up a growing number. At the end of 2011, Ledbury estimates that there were nearly 650,000 individuals in the UK with £1million or more, 37,000 with £10 million and above and 2,100 with £100 million or more.

Ledbury expects this dynamic to continue into 2012, although to a lesser extent than in 2011.

In separate research, US firm Fidelity Investments came out with its 2012 Millionaire Outlook.

One of the key findings from the survey of about 1,000 households with net worth of $1 million or more is wealthy households are more optimistic about financial markets. Although the overall view that millionaires have about the current financial environment is somewhat negative, sentiment has picked up substantially since its 2009 lows.

Millionaires confident about investing

Millionaires are confident about investing in the stock market, said the Fidelity report.

Poor real estate prices and a sluggish economy are a concern for many of them,  but their positive opinion about the stock market even out their pessimism.

“One trend has held true throughout the life of this study – the millionaire investor’s outlook has been consistently pragmatic about current market conditions and pervasively optimistic about a future recovery,” said Michael R. Durbin, president, Fidelity Institutional Wealth Services.

“In many ways, what millionaires have been thinking and doing can be a strong indicator for financial trends, as they are often the first to jump on an opportunity in the market – as they have recently with domestic stocks.”

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