The UK will suffer a greater net exodus of millionaires than Russia by 2023

It is expected that the United Kingdom see a net outflow of 3,200 HNWIs in 2023, higher than the projected net loss of 3,000 for Russiaaccording to the Henley Private Wealth Migration Report 2023.

This will make the UK the third biggest loser of millionaires globally after China (net loss of 13,500) and India (net loss of 6,500). Perhaps most notably, the expected flight of HNWIs from the UK is double that of last year, when there was a net exodus of 1,600 millionaires.

The report by investment migration advisory firm Henley & Partners presents the latest net inflows and net outflows of dollar millionaires (that is, the difference between the number of HNWIs with investable wealth of $1 million or more who move to a country and emigrate from another), as projected by global wealth intelligence firm New World Wealth. The figures only focus on HNWIs who have relocated, that is, who stay in their new country for more than six months of the year. Note: All HNWI figures are rounded to the nearest 100.

The south is back on top

Australia is expected to attract the largest net influx of HNWIs in 2023 at 5,200, and while the UAE falls to 2nd. Following its record influx in 2022, it is expected to continue to enjoy an impressive net arrival of 4,500 new millionaires this year. Singapore ranks 3rd. place with a net inflow of 3,200 HNWI, the highest on record, followed by the United States with an expected net inflow of 2,100 millionaires.

Switzerland (net inflow of 1,800) and Canada (1,600) rank 5th and 6th, respectively, and Greece (1,200), France (1,000, double last year’s net intake of 500 millionaires), Portugal ( 800) and New Zealand (700), are part of this list of the Top 10 net influx of HNWI this year. Israel is set to drop out of the Top 10 as its net influx of millionaires is expected to drop to 600, almost half, from 1,100 in 2022.

Dr. Juerg Steffen, chief executive of Henley & Partners, says there has been steady growth in millionaire migration over the past decade, with global numbers for 2023 and 2024 expected to be 122,000 and 128,000, respectively. “Overall, wealth migration trends appear to be returning to pre-pandemic patterns this year, with the notable exceptions of the former major wealth magnets, the United Kingdom and the United States.”

Brexit, a bad bet for Great Britain

The UK’s peak net emigration year was 2017, after the Brexit referendum in 2016. Prior to this, the country enjoyed positive net inflows of HNWIs. While net losses fell slightly between 2017 and 2019, projections to 2023 indicate that much more significant millionaire emigration is currently taking place.

Prof Trevor Williams, former Chief Economist at Lloyds Bank Commercial, said: “No matter what one may think about the merits of Brexit, this cohort is voting with their feet. Coupled with the policy change to remove permanent non-resident taxpayer status, Brexit has made the UK less hospitable and welcoming to HNWIs.”

Sunita Singh-Dalal of Hourani & Partners agrees that “The recent disturbing UK ‘Absence Debate’ triggered by unprecedented political volatility, coupled with rising debt, a dysfunctional healthcare system, high crime rates and a general sense of lingering malaise, has clouded clearly the luster of London.”

The attractiveness of another financial giant, the United States, is also waning rapidly. The US is notably less popular now with migrant millionaires than it was before Covid, due in part to the threat of higher taxes. The country continues to attract more HNWI than it loses to emigration, with a projected net inflow of 2,100 by 2023, though this is a staggering drop from 2019 levels, which saw a net inflow of 10.8 billion.

The other big losers of 2023

As it has for the past decade, China continues to lose the largest number of dollar millionaires each year to emigration. Andrew Amoils, director of research at New World Wealth, explains that “China’s overall wealth growth has slowed in recent years, meaning recent emigration could be more damaging than usual”.

Although it is the second biggest loser globally, India’s net exodus numbers are projected to drop to 6,500 in 2023, compared to last year (7,500) and as Amoils points out, “these exoduses are not particularly worrisome, as India produces many more new millionaires than it loses to emigration.

The UK (3,200) and Russia (3,000 vs. 8,500 in 2022 after their invasion of Ukraine) rank 3rd. and 4th. place, respectively, with Brazil (1,200), Hong Kong (SAR China) (1,000, less than half the actual net outflow in 2022), South Korea (800, double the country’s net outflow in 2022), Mexico (700), South Africa (500) and Japan (300 compared to last year’s actual net loss of 100), which make up the remainder of the Top 10 millionaire loss forecast to 2023.

Award-winning journalist Misha Glenny says the lessons for those hoping to attract HNWIs are clear. “Political stability is the key metric, along with low tax rates and personal freedom. Until the end of the Russo-Ukrainian war, HNWI will continue to be exported by both countries, and this will remain the main driver of relocation. But with elections looming in many key Western countries in the next 18 months, other HNWIs may wait until their outcome, especially in the US and UK, before choosing.”

Source: AP