Wealth is draining out of the UK

[Ifmenhadperiods]

I was at an event with business people the other week. One of the high net worths said to me that no wealthy foreigner he knows will stay in the UK long term. He is local but says anyone with foreign connections and wealth is fleeing abroad - and taking their businesses with them. That is the chat around his dinner table in Holland Park.

One indisputable piece of evidence I guess is the massive slump in companies that list in the UK. We also have so few pension funds investing in UK business. Personally I don’t blame them: my own shares ISA is invested in the US and has grown by 30% in the last year, a figure UK shares just can’t compete with. Most of our FTSE top companies are in legacy industries like fossil fuels while elsewhere they’re in tech and innovation as well
as traditional companies.

Several friends have left here and gone to the US in the last decade and they say the lifestyle is excellent (and they earn far more, working in tech).

I have also spoken to friend’s older DC (6th formers) and some who have had offers from Oxford and Cambridge are rejecting them in favour of Ivy League schools.

Apparently Ivy leagues are FAR better at getting students to think about their careers from day one. Oxbridge is amazing at teaching you the subject in an academically rigorous way, but Ivy leagues pair you up with business investors if you do a degree such as economics. They have fees assistance for households earning up to 400k US dollars. Here you can’t get student loans if you have more than about £50k in household income.
I know the fees are higher there but they also have more scholarships in the US.

We are about to tax private schools. A popular policy with the public. But again, apparently the wealthy foreigners who can afford this tax are worried it will shake out the middle class Brits they want their kids to go to school with! They don’t just want their kids to go to school with foreign and British super elites. They’re quite fond of the eccentric Brits.

It seems every way you turn, there’s little incentive to make money especially with the cliff edge in income taxation. And the worst thing is it’s understandable because of the massive levels of wage stagnation we have to subsidise through working tax credits (no real wage growth for 20 years!).

We don’t want immigrants but we have no one to pay for our massive welfare bill which is made up mostly of a triple locked state pension and grossly inefficient health system.

If you’re lucky enough to have a bit of spare cash, forget moving up the property ladder, owning a holiday home or a rental (tax hell lies in all those paths).

Can anyone shake me out of this pessimism? Of course I know we are lucky not to be in Syria or Afghanistan or Gaza. But this is about the decline of the UK rather than where we are compared to truly volatile or oppressive countries. I genuinely don’t want to emigrate but fear we - along with anyone who was once comfortable but never wealthy - are going to have a very uncomfortable retirement - if I make it that far - and our DCs will face a future in a country that will continue to get poorer, with the entrepreneurial class deserting us.

I agree @AlpineMuesli . It’s one of the reasons I want to stay here and think the climate will be ideal in 20 years here! Provided we don’t lose the Gulf Stream (and steer clear of low lying coastal areas). I recognise we have it much better than other countries and I wouldn’t trade the anti-abortion stance and gun violence and high insurance co-payments of the US for here. But I am worried (have always been a worrier!).

Again, this has happened under a TORY regime. This is not a Labour bashing thread. I am concerned at the anti-immigrant and VAT on education policy but I hope that is just for the benefit of drumming up votes and that the grown up policy-making happening behind the scenes.

Good point by PP about Russian sanctions and
dirty money fleeing.

I appreciate it’s probably unrelatable and very metropolitan @NissanHonda. I am not a high net worth but do come across them through work and other settings. Some of them are job creators. So I do worry if they leave. And ISAs and investments are mega important. I wish I had thought more about this before middle age. In the US, it doesn’t matter if you’re pumping gas or working as a teacher or on a company board: everyone thinks and talks about investing. It’s not just something for rich people. I wish we had more of that mindset here. I wonder if the class system has made us passive and resigned to staying in our lane.

What on earth are you on about with your ridiculous claim that students with parents whose income is £50k plus can’t get loans?!!!

My household income is over £100k. My DS borrowed the tuition loan and got a living costs loan of about £4500 a year and we topped it up to £10k and he worked in the vacs.

Aye right.

@Ifmenhadperiods it's true that a lot more people in the US think about investing, but tbh, I found the focus on money/wealth accumulation exhausting when I lived there (and still now when I go back to visit)!

More importantly, the reason Americans think that way is because they have very little in the way of a safety net - just look at pensions and healthcare. It's not that they're natural go-getters; they have to think this way to survive.

But that’s the point @Maray1967 . We have to top up their living costs - finding another 10k a year for young adults at a time when some
of us had hoped to be winding down work.

Good perspective @angrygoat2 . I wonder if there is a happy medium as I can’t see how
we will continue to have the safety net. I am encouraging my DC to think now about saving.

Ha

The grass is always greener op! I work in global team so friends all over the world. The americans get paid more but work hideous hours and never take holiday. They earn every penny with sweat and blood. The politics over there is facing many of the same issues we have here. Its not a good place to be on a low income, and there's a huge wealth divide. The health insurance system can be a nightmare.

Australia can be nice but has the same cost of living issues in sydney etc we have here - younger colleagues can't afford to buy a home. They are struggling with attitudes to immigrants too.

There are loads of high tech jobs in the uk and loads of tech companies in the ftse 100 & 250. You likely won't have heard of them.

The uk is a good place to be in many ways.

We have relatively safe, mild weather with few extremes. We have world class education and healthcare free to all at point of use. Food is relatively cheap & less processed than countries like the US. We have a lot of freedom.

Oh and as a very high earner who's been offered us roles before i wouldn't go there for anything!

Its very dog eat dog. They work very very hard and its not out of choice its out of necessity.

Typo. It's Hertfordshire. Waltham Cross.

The income tax cliff edge is an issue but wealthy people aren’t generally on PAYE & income from other sources is taxed more favourably.

there is an serous problem with wage stagnation but a lot of that was because of QE & an economy based on ever increasing house prices with little investment elsewhere.

We do have an ageing population & a crumbling NHS which isn’t really sustainable. Nothing will do about immigration as it’s needed.

The problem is particularly for younger people they have low wage growth, high housing costs & high taxes. More professionals will look to go abroad. Housing is probably the biggest issue.

Well, you got the answer on your own post. Invest in new technologies, environmentally friendly and set for today and tomorrow's world, not yesterday.
I cannot wait to get rid of Sunak. He just approved oil and gas prospections on areas designated for wind power. And the tories have been delaying the expansion of our windpower resources for ages now. Apparently putting up solar pannels on fertile farm soils is a good thing to them?
There are beautiful technologies out there. Batteries that work with moisture in the air (yes, it does exist!). Wave power, which could be the best thing since sliced bread for UK, right?
But nothing from this idiotic government.

But as pp says a big plus is the climate.

The wealth graph was also interesting. Only applies to top 10 richest though.

So does most of your OP.

Incidentally, there’s no ceiling on student loans.

I work in an exclusively HNW and UHNW private client tax advisory firm, with a large non-dom department as you might imagine.

This is not our experience at all. Most are keen to stay in the UK.

Meh. Let them leave.
I'm struggling to feel sorry for people who won't be able to afford private education. I honestly couldn't care less.
And are you trying to say oxbridge students can't get international jobs? That's obviously just not true. The fact that they are so academically focused is one of the reasons they are so valued around the world. Ok - they might not become a tech bro in a start but....actually....let me just think about the data scientists who are employed in the UKs most successful AI company? Oh yeah, they're all oxbridge students.
In other news - have you noticed the UK film and production industry? It is BOOMING!

Never heard of Silicon Fen @Ifmenhadperiods? Cambridge is the centre of tech innovation and advancement in this country because of the relationship with the university.

My vanguard ftse all share is up 47%.
US funds are 79.

The ftse is doing really well.

Better than eurozone funds or Japan etc.

Interesting article on bloom berg about companies not listing here apparently it's of negligible differences.

People of high net worth are flexible.

Google is investing in a massive new build in Hereford.

You mean Hertford. It will be a data centre. Google won''t say how many jobs will be created, but on average Google data centres employ around 100 people.

Another example for you. The site of what used to be the Ford engine plant in Bridgend, South Wales, employing 1,700 people, has been bought by Vantage, which runs data centres. It hasn't said what for exactly.

But when you consider that Vantage has 32 data centres worldwide and only employs 1,300 people in total, it's unlikely to replace Ford.

We run our business, we employ highly skilled individuals - we struggle to recruit talented people. London used to be full of opportunity but the housing market and the atmosphere created by the conservatives and their Brexit and The Boats obsession have created a hostile environment - Theresa May will be thrilled. Talented young Europeans don't hang around for long, we see lots of talent moving up North too - which on the plus side, will hopefully be a good thing.

I worry about my kids though - I worry about the low salaries they will struggle to live off, and we will end up subsidising them because of the extremely high rents, I don't think that's very healthy - they should be able to afford to work and live on their salary. I worry about kids from less wealthy backgrounds how do they do it? We are wasting homegrown talent, and social mobility feels like a very low priority. We have a lazy approach to training - no new ideas, apprenticeships are not working fast enough - we need to train our young people in the skills we used to import from Europe, why aren't we investing in tech colleges?

Life for us is pretty good though, we have broad shoulders, it allows us to weather most of this government's screw ups - I don't really understand having millions and being obsessive about local taxes and allowing that to drive your decisions...you'd think the more money you had the more able you'd be to weather it. I have lived in several countries and whilst I enjoyed the experience, it would have to get a hell of a lot worse before I'd consider a move.

I can’t how the OP is not blaming 14 years of successive Conservative governments and their fiscal and socio-economic policies, though?

Great britain there is nothing great about it.

Op I know what you mean and 100% agree with what you have written. Let's not be blind and patriotic just for the sake of it, there's nothing great about Great Britain as the pp has put it.

There are not loads of high tech jobs in the UK compared to the past, 1,185 tech companies axed 262,242 staff in 2023 in the UK. I've never seen so many posts on my LinkedIn feed about redundancy / open to work and tech vacancies on Job boards are very low compared to the past..

Wages are stagnating compared to food / housing. Tax thresholds have not gone up with inflation. The very rich e.g. Mr Sunak (750 million worth according to the Sunday Times) have of course got wealthier and bought more assets.

It's interesting how the wealthiest complain most about tax when actually they tend to be comparatively low taxed compared to the rest of the population https://views-voices.oxfam.org.uk/2023/01/how-super-rich-pay-lower-taxes-than-you/

No there aren’t. That’s because we don’t make anything any more. We’re brilliant at innovation and then the Far East picks up those ideas and manufactures the results. Thatcher killed our manufacturing base, turned us into a country dependent on the service industries and here we are. I absolutely hated her when she was in power but it’s only now that it’s becoming obvious just how much damage her 11 years at the helm caused. The seeds of the housing crisis were sown then too.