Britain’s count of sterling‑millionaires has fallen sharply, dropping from a peak of 1.07 million in 2021 to an estimated 442 000 in 2025 – a decline of roughly 59 % over four years, according to the Adam Smith Institute’s tracker updated on 28 July 2025.
Definition and measurement
- A “constant‑price sterling millionaire” is an adult UK resident with at least £1 million (≈ US$1.33 million) in individual net‑worth, measured in constant 2025 prices. Net‑worth includes all real and financial assets, pensions and property.
- The Institute models the count because the UK has no official register of personal wealth. It starts from the Office for National Statistics (ONS) total household net‑worth (£10.75 trillion in 2024) and applies a Pareto distribution (α ≈ 2.919) to estimate how many individuals exceed the £1 million threshold.
- The method reliably tracks year‑to‑year change but the absolute level is uncertain; the ONS Wealth and Assets Survey lost its accreditation in June 2025, and the Institute notes the estimate’s absolute accuracy is limited.
Recent trend
- The decline has been continuous each year since 2021, with the 2025 figure 7 % lower than 2024.
- The count first passed one million in 2020, peaked at 1.07 million in 2021, and has now fallen to its lowest level since the 2008 financial crisis.
Drivers identified by the Institute
- Higher interest rates and weak economic confidence – reduced the inflation‑adjusted value of pension pots and high‑end London property.
- Low household savings – slowed the rate at which households reach the £1 million threshold.
- Emigration of wealthy residents – attributed to the end of the non‑domestic (“non‑dom”) tax regime, high overall taxation, and a perceived hostile environment for wealth creators.
Policy changes affecting wealth
- Non‑dom regime – Closed to new arrivals in April 2025; replaced by a four‑year foreign income and gains regime.
- Investor visa – The Tier 1 (Investor) visa was shut in February 2022; a proposed £5 million “invite‑only” investor visa was discussed in June 2025 but, after internal opposition, appears to have stalled.
- High‑Value Council Tax Surcharge – Consultation closed 14 July 2025; from April 2028 owners of English homes valued at £2 million+ would pay £2 500‑£7 500 annually, depending on value.
- Settlement overhaul – A command paper (Nov 2025) proposes a 10‑year baseline for indefinite leave to remain, reduced by seven years for individuals with taxable income above £125 140 in the three preceding years; consultation closed 12 Feb 2025, with no rules yet published.
Political context
- Labour’s Keir Starmer resigned as party leader on 22 June 2025; Andy Burnham became prime minister on 20 July 2025 and appointed John Healey as chancellor.
- The new government has pledged to keep the main rates of income tax, VAT and employee NIC unchanged, and has not made an immediate wealth‑tax proposal.
- The first Budget under Healey is unlikely before the autumn, given the requirement to give the Office for Budget Responsibility at least ten weeks’ notice and the summer parliamentary recess.
Commentary from experts
- Mitchell Palmer (Adam Smith Institute) warned that the decline should be seen as a “warning signal” rather than a success for left‑wing policy.
- James Quarmby (Stephenson Harwood) noted the ease with which high‑net‑worth individuals can relocate assets and businesses.
- David Lesperance (Lesperance & Associates) expects “dramatic increases in capital gains tax and/or an exit tax” could trigger a surge in departures, especially between the Autumn Statement and the April year‑end.
- The Institute cites France, Austria and the Netherlands as examples where wealth taxes were abandoned after capital outflows or avoidance.
Implications for advisers and wealthy residents
- Roughly 628 000 fewer individuals have crossed the £1 million threshold while aggregate real household wealth fell 19 % between 2021 and 2023.
- No Budget is scheduled before the autumn, the High‑Value Council Tax surcharge consultation has closed without a decision, and the proposed investor visa lacks cabinet support.
- Advisers should monitor the timing of the upcoming Budget, the outcome of the council‑tax surcharge, and any future changes to the foreign‑income regime, as these will shape the tax environment for high‑net‑worth clients.
Source article: www.imidaily.com
