Home Business News 75 per cent of high net worth individuals think a change in government threatens their finances

75 per cent of high net worth individuals think a change in government threatens their finances

by LLB Editor
22nd Oct 19 10:14 am

High Net Worth Individuals (HNWIs) perceive the prospect of a change in UK government as the single biggest threat to their finances, according to new research by wealth manager Saunderson House.

In its report, Passing on Wealth: Motivations, Emotions and Challenges, Saunderson House finds that 75% of HNWIs think that a new prime minster in 10 Downing Street threatens their financial wellbeing and independence. In a survey on financial wellbeing conducted by Saunderson House last year, 42% of HNWIs identified a change in government as one of their primary concerns.

Relatedly, HNWIs consider a potential change in the amount of tax they will have to pay as the second-biggest threat to their finances, with two-thirds (66%) concerned by this. Saunderson House’s separate survey in 2018 found that HNWIs ranked the potential for more punitive taxes as the seventh-biggest threat to their finances (17%).

Since Saunderson House published its research on financial wellbeing, the IPPR think-tank has published a paper advocating for more progressive taxes that would penalise the UK’s wealthy, and the Labour party declared its intention to replace the current inheritance tax with a lifetime gifts tax in its recent Land for the Many report.

Gareth Parsons, Financial Planning Director at Saunderson House said, “Our research took place against the backdrop of ongoing political and economic uncertainty, so it’s not particularly surprising that HNWIs consider a change in Government as their biggest financial threat. What is more noteworthy is the sizeable increase in the number of HNWIs who are concerned by a shift in tax rates, which is a likely reaction to recent noises around an increase in income tax for the wealthy, and the recent Office for Tax Simplification (OTS) report on IHT.”

The research also finds that almost half (49%) of HNWIs consider a deterioration in their non-financial wellbeing, including good physical and mental health, as well as having clarity and confidence over future plans – as the third-biggest threat to their finances and overall independence. And 41% of HNWIs think a global economic slowdown also threatens their financial wellbeing, which is an increase on 2018 (up to fifth-biggest, from sixth).

Parsons added, “We conducted this research to better understand what concerns HNWIs have when it comes to passing on wealth. At Saunderson House, we recognise the connection between people’s finances and their non-financial wellbeing. Consequently, we encourage our clients to adopt a holistic approach when it comes to their finances, so that they don’t separate their finances from their personal life. And with more HNWIs worried about how global affairs can negatively impact their finances, it’s clear that HNWIs are aware of how events like the US-China trade war threaten their financial wellbeing.

“Whilst there is no single remedy for today’s political and economic uncertainty, professional advice can help people manage those risks effectively. As well as good communication, clarifying your risk appetite and diversifying your investments can help protect your money and ensure that you pass on your wealth in the most impactful way possible.”

Leave a Commment

CLOSE AD

Sign up to our daily news alerts

[ms-form id=1]