The super-rich are getting richer, again – and millennials are leading the way

The number of wealthy Brits rose in 2023, more than reversing the decline reported post-pandemic in 2022.

Ultra-high-net-worth individuals (UHNWIs) – classed as those with over $3m in net wealth – increased in the UK from 601,300 to 626,619 on global economic growth and easing interest rates, according to the Wealth Report by Knight Frank.

“The improving interest rate outlook, the robust performance of the US economy and a sharp uptick in equity markets helped wealth creation globally… [there were] nearly 70 very wealthy investors minted every day,” Liam Bailey, global head of research at Knight Frank said.

High debt in sectors like real estate and private equity was offset by boosts in the stocks, rents, gold and bitcoin.

The S&P Global 100 rose by 25.4 per cent in 2023, largely on the back of the “magnificent seven” US tech stocks.

The number of UHNWIs is forecast to grow by 28.1 per cent in the next five years, significantly slower than the 44 per cent growth seen in 2018-2023. 

Growth in the number of super-rich will be hit by higher inflation, although will still remain higher than underlying population growth, according to Knight Frank. 

The increase in the next five years will be driven by millennial UHNWIs as wealth starts to cross generational boundaries – $90 trillion of assets are set to move between generations in the US alone in the next 20 years, making affluent millennials the richest generation in history.
 
However, UHNWIs remain interested in real estate: around a fifth plan to invest in commercial real estate or residential real estate this year.  

This will likely lead to a higher focus on environmental concerns, as millennials are consistently more interested in cutting consumption and going green than boomers.

In terms of regional differences, North Americans led the pack this year, with the number of UHNWIs up by 7.2 per cent, followed by the Middle East and Africa at 6.2 per cent and 3.8 per cent respectively.

“Outside Asia, strong growth is focused on the Middle East, Australasia and North America, with Europe lagging and Africa and Latin America likely to be the weakest regions… a key question is whether future growth remains within these and other high-growth markets, or whether there is a leakage of talent to Europe, Australasia or North America,” Bailey said.