In 2009, the number of high net worth individuals in the UK jumped by 23.8% but rose by just 1.4% last year, to 454,300. Its high in 2007 was just shy of 500,000.
However, in Europe, its high net worth population rose by 6.3% in 2010, with the assets they hold growing by 7.2% to $10.2trn.
The figures were included in the Merrill Lynch Wealth Management Capgemini World Wealth Report 2011 that put the UK figures into context of its stock market increasing by 29.2% last year in terms of market cap, and a return to positive GDP growth of 1.3% compared to a contraction of 4.9% in 2009.
Against this, the report noted a rise in unemployment and a house price decline of 4.5%.
“In UK real estate, house prices showed some signs of recovery in 2010 but subdued consumer sentiment and an indebted commercial property sector will weigh on housing market activity,” it said.
Globally, the population of high net worth individuals grew beyond its 2007 levels in nearly every region. In 2010, there were 8.3% more high net worth individuals than in 2009, with the value of their wealth rising 9.7% to $42.7trn.
The US, Japan and Germany account for just over half the global high net worth population, with 28.6% in the US alone.
This is likely to change over time as the emerging countries grow their own wealth. Asia Pacific has now overtaken Europe in terms of high net worth individuals’ wealth and population. Its population grew by 9.7% to 3.3 million while Europe grew by 6.3% to 3.1 million.
Asia-Pacific wealth grew by 12.1% to $10.8trn compared to 7.2% and $10.2trn in Europe.
By the end of last year, high net worth individuals held 33% of all their investments in equities, up from 29% in 2009; cash/deposits fell to 14% from 17%; fixed income dropped from 31% to 29%; commodities rose from 16% to 22%.
Looking forwards, Adam Horowitz, head of UK, Ireland and Israel at Merrill Lynch Wealth Management, predicts high net worth individuals will further increase their equity and commodity allocations in 2012 at the expense of real estate and cash.
