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.

The UK has one of the highest rates of wealth flight in the world. They are indeed leaving.

So they’ve wrung every penny they can out of the UK and are now moving on to the next place?

Or in the case of higher earners - they have subsided the country and are fed up of doing so.

Those on PAYE are over taxed in the highest brackets. They pay more than comparable countries. The real kicker? Their salaries are often shit in comparison to other countries such as USA (especially tech and IT). To top it all, they don’t see the benefit of these high taxes like the Scandi countries. So good services and childcare which they are not banned from using. The Scandi countries have the foresight to realise those funding it shouldn’t be cut off.

So after the country and everyone else bleeds them dry they fuck off and take their skill set and taxes with them. Most of these people are highly skilled and in demand with modern countries - hence the salary they can command. Market forces. This is why net contributors are decreasing.

Denmark's population is 10% of the UK, <6 million versus edging towards 67 million (without counting a significant number - estimated at over a million - living under the radar). The Danish population is much more homogeneous too. Our two nations are quite similar temperamentally and I am not opposed to borrowing the best of their ideas and applying them here. But I think the English have an instinctive oppositional switch.

And yes, as a Uk person on the verge of retiring, albeit from risk-taking self-employment-entrepreneur territory, with money earned over a lifetime's work, never minted but comfortably able to live a pleasant life, DH and I do seriously consider relocating. I don't have any employer pension to lose in the UK. Every single thing we have is based on what we earned, or paid towards in taxation. No individual pays for the M1, the state pays, we all use it, and contribute, via road tax and fuel duty.

But if we were to relocate to, say Portugal, which rather likes British retirees, and encourages them, we would sell the house and close the business. Another family will love our house; we've lived here 27 years and at 67/8, it will be a bit too big for us as soon as DC25 moves out next month. More sun for more months in winter sounds lovely too. Yet, we hesitate; we really don't want to tear out our deep roots. We want to live within 90 minutes of old friends so we can, on the spur of the moment say, have lunch tomorrow? meet at x, it's mid way, the menu looks great. The UK needs to create the feel good factor for the middlingly successful person, routinely. I apologise to everyone who feels they ended up with a worse option who is criticising my "privilege" (such a cheap easy shot). The only thing I can say is that the only place success comes before work is in the dictionary.

Are tech and it particularly high earners in the uk? They might go to other countries to earn higher salaries but not because of high taxes. Scientists and doctors are doing the same thing and again it is often due to not being paid that well in the uk.

Nope; the salaries are poor in comparison - even the 6 figure ones. To boot they are highly taxed in comparison too. They are typically “higher earners” but the companies lowball salaries for the UK.

Please don't offer the care worker on NMW defense. Sorry for you. During the stage of building my career I worked 14-16 hours every day to be good at my work.

It's OK, everyone can stand down, the UK is officially out of recession and on the up x

Yay Rishi x

Jam tomorrow 😆

NO. Jam first, then clotted cream.

😂 You are completely correct !!

The salaries in other countries are poor compared with the uk or the other way around?

Thickly spread...

Salaries in the UK are way lower than the US, at least 50% lower, which is probably the best comparison in terms of intellectual content. I returned from five years in NYC second rank financial services to London and my salary plummeted from $36k (in 1985) to £18k.It was comfortable at the time. I cannot believe my own stupidity in retrospect.

But it explains why the City retains its position in the financial world. It's pretty much the only place other than New York that clever, very ambitious people can guage their value and earning potential.

Compared to the US, the UK salaries are not attractive. However, if you are exceptionally good/talented , the rules change. Of course they do. Who would pay everyone the same? Rewards are paid to those who bring business to their employer. Or who create something new and valuable.

We're a microsopic engineering company, but our guy who told the customer we knew how to do what he wanted, which turned into a £100k order, is on a long term meal ticket.

The UK salaries are very poor and highly taxed in comparison. Just an example of a job in IT (global company). £110k UK and ridiculous tax which encourages you not to go to £100k vs £250k USA and better tax and incentives.

@Papyrophile I do understand- we built up our own thing too - have never claimed-we live and die income wise by the success of our products - enjoyed our 2 years in Copenhagen a lot- it did give me a new perspective - I think it's likely we will go to Majorca in next few years as we have the kind of income that makes it easy under Spanish nomad visa - and enough to come back regularly- I do think the UK has become depressing in many aspects - it's not just COL, it's that places have become 'dead' because so many are struggling- it's that our water and beaches are being polluted- it's the underlying 'vibe' simply isn't good - plus the weather is shit (although lovely last few days)

Don't know if this has been addressed but it is not possible to 'choose' not to work anymore.

If you have no medical reason not to work you will be sanctioned (ie money taken off the paltry amount given - look it up!) if you are shown to be not looking/applying/making every effort to get a job for a set number of hours a week.

If you are deemed not fit for work, this will be as a result of a dossier of evidence from medical professionals most likely after having to appeal the original -stitch up- decision.

Worry not, vulnerable people have died due to having their benefits cut so the system is working as you want it to and you can sleep easy that your hard won money is in no way going to support other human beings that you feel are unworthy.

(And no, evidence to the contrary does not include your neighbour's/mate's work colleague's/cousin's chihuahua's multiple foreign holidays, designer clothes, massive telly 'all on UC')

Sounds like you need more interesting friends!

It would be better for society and the economy if skilled workers were paid more rather than taxing the wealthy less. Not all wealthy people contribute much to society. Some are exploitative and the uk could do without them.

So right about the underlying bad vibe of the UK at the moment. There is no positivity, it’s all very grim and depressing. You can really feel the decay on the streets now, especially in the cities where it’s the norm to see filth, litter, addicts, graffiti, homeless and more - even in the ‘nicer’ parts.

The water companies have polluted the rivers and sea by dumping sewage while the directors paid themselves millions. They get to keep their money while the uk public have to pay the cost of cleaning the water via increased water bills. A good example of how some people get rich and a bit hard to feel grateful for the taxes they pay.

But this was surely due to lack of oversight by Ofwat who were being paid salaries from the public purse to do a job- they either didn’t do the job or had interests in the water companies doing well and paying out to shareholders so chose not to do the job. This has gone on for years - journos also not on the ball.

You seem very sure about what life is like in the US for someone who has never lived there.

Pensions and healthcare are pretty good for a vast number of Americans, contrary to popular British belief.

The majority of Americans do not own stock or shares. Most rely on Social Security, with private pensions, savings, and income from sale of a family home making up a proportion of retirement income too.

American experts recommend setting aside 15% of total income for retirement. In addition, there are tax free saving vehicles like IRAs or 401k funds. Because of higher incomes, setting aside retirement funds can be possible.

Most of my friends who have retired have work related pensions, and also money market funds. They have also downsized and reaped the benefits of living in good school districts where their property taxes have funded excellent public schools and superb public amenities like parks, playgrounds, public pools, playing fields, tennis courts, rinks, libraries, and public services like police forces, elder services, youth services, etc. Property taxes fund a lot of local services in the US.

The idea that you get out what you put in is put into practice every day. Hence a strong work ethic, but also a lot of civic spiritedness and volunteering, which do not have their roots in fear of destitution.

I have lived in a few countries and the UK can be good. I like cities like London though.

Not everyone will prefer the US and that’s fine, although it has many positives too. I do think it’s a mistake to foster the get rid of people funding stuff. If that gets going too much people left be able to pick up the tax burden.