Money is a widespread concern amongst high-net worth individuals (HNWIs), a recent study has found. Despite feeling optimistic about the UK economy and the short-term prospects of their finances, many of those surveyed felt an underlying anxiousness about their money.
The research conducted by Saltus financial planning and investment management company, questioned over 1,000 respondents with investable assets over £250,000. The survey collected their thoughts on the economy, finances and personal lives — data of which formulated the firm’s first Wealth Index, launched in October 2021.
Of those surveyed, nearly two thirds (61%) of HNWIs said they felt anxious about their money, but this differentiated between generations.
Financial anxiety
The survey revealed that younger HNWIs are more likely to experience anxiety when it comes to their wealth, compared to those in the older generation. 67% of respondents aged under 24 agreed with the statement ‘my money makes me feel anxious’. This is significantly more than just 8% of respondents over 65, who somewhat agreed that they feel anxious about their money.
When broken down by net worth, the Saltus Wealth Index shows that those with greater assets are more likely to be anxious about their money. Just over half (54%) of those with assets between £250,000 and £1 million said they felt anxious about their wealth, which is lower than those with assets of over £1 million — with two thirds disclosing their feelings of anxiety.
However, in the short-term (six months, in fact) 90% of respondents felt confident about their finances. In addition, over three quarters (76%) of HNWIs believe that their money is a source of freedom, with most respondents acknowledging the benefits of financial security.
It may be the case that those who have more confidence about their own wealth, are benefiting from a robust financial plan, or are consulting with an expert financial adviser.
COVID-19 is the top financial concern
There are several factors that may be causing concern amongst HNWIs when it comes to their wealth. When identifying the biggest financial risks, the survey revealed that the pandemic is considered the greatest threat. Almost a third (31%) of those surveyed believe the long-term impacts of COVID-19 are the most concerning.
But in unprecedented times, there are other significant worries felt by the wealthy, including:
- Inflation (28%)
- Interest rates (24%)
- Brexit (24%)
- Climate change (21%)
Again, this varies between age groups, as it was found that older HNWIs are more concerned with inflation. Only 19% of those aged 65s citied COVID-19 as a source of worry, but 50% noted inflation as their biggest concern. This is compared to just one in five of those aged under 35 who thought the same.
UK economic prospects
Despite the anxiety and concerns felt by HNWIs, caused by the pandemic and Brexit, the survey found that positivity still remains when considering the UK economy.
An impressive 80% of the respondents felt confident in the future of the UK economy — 33% of whom were feeling very confident. Overall, there are high hopes for the economy, however views differed between regions and age groups.
The assurance in the nation decreases by age. Those who felt very confident about the UK economy as a whole in terms of the next six months, responded as follows:
- Aged 18-54 — 37%
- Aged 55-65 — 14%
- Aged over 65 — 5%
The optimism felt was also dependant on the where the respondent lived. The research found that those living in Greater London (41%) were twice as likely to feel very confident about the UK’s economic prospects, compared to those living in the West Midlands (18%).
The most optimistic HNWIs reside in Northern Ireland, with a staggering 91% feeling confident about the economy over the next six months.
As previously mentioned, those who have confidence may have consulted with a financial planner. Having an expert financial plan in place can help you feel rest assured about your future and achieve your financial goals, at any stage in life.
Disclaimer: Information is correct to the best of our understanding as at the date of publication. Nothing within this content is intended as, or can be relied upon, as financial advice. Capital is at risk. You may get back less than you invested.