Survey Predicts ‘Crime, Taxes And Cost Of Living’ Could Speed Up UK “Wealth Drain”

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Increasing concerns about negative socio-economic factors may cause wealthy people to leave the UK, a Lloyds TSB International survey has anticipated.

Sadly it seems August’s riots, tax increases and a rising cost of living have cast a pall over life in the UK for some wealthy people

Increasing concerns about negative socio-economic factors may cause wealthy people to leave the UK, a Lloyds TSB International survey has anticipated.

  •     Report looks at increase in wealthy people looking at moving overseas
  •     Crime highlighted as one of the main reasons
  •     High taxes and the rising cost of living also noted as an influences

There are now more wealthy people in the UK that are considering moving to a different country than there were just six months ago, a new survey has found. The research, conducted by Lloyds TSB International Wealth, revealed that crime, high taxes and increases in the cost of living in the UK were all reasons that were both key to the findings – and were growing.

British residents with more than £250,000 of savings and investments were polled as part of the report and 17 per cent admitted they would like to move overseas in the next couple of years. This figure compares to the 14 per cent who said the same just six months ago and equates to over 450,000 people1 nationally.

It was reported that growing fears about crime had soared over the last six months, with 61 per cent of those who said they were actively considering a move abroad stating that crime and antisocial behaviour was a key reason for wanting to leave the UK. This increase follows the widespread rioting that plagued the UK in early August and compares to a figure of 43 per cent from six months ago

It was revealed that 62 per cent were more concerned about problems relating to criminal behaviour and antisocial behaviour than they were just half a year ago. In fact, just one per cent of respondents said they were now less worried. A further 73 per cent of those who admitted they were thinking about emigrating at some point in the next two years agreed that crime was now a bigger problem in Britain than it is in other developed countries.

Another point raised in the poll was that the cost of living and increasing taxes was a big worry for many wealthy people in the UK, which 42 per cent said could be reason enough for them to move abroad in the next two years.

This is up by 7 per cent on six months ago, with the proportion of people stating the cost of living as their main reason for wanting to leave up from 31 per cent to 52 per cent in the same period. All of this comes just a few months after the government’s decision to introduce the top 50p income tax rate in April. According to a recent report from The Institute for Fiscal Studies report², this could well cost the UK economy as much as £500 million per year, thanks to the number of people it will force into moving their wealth overseas.

Nicholas Boys Smith, Managing Director of Lloyds TSB International Wealth, added that recent reports could re-ignite fears of a UK ‘wealth drain’ that would see richer Britons look at moving overseas. “Sadly it seems August’s riots, tax increases and a rising cost of living have cast a pall over life in the UK for some wealthy people,” he said.

HMRC projected in February this year that over the course of the 2010/11 tax year, the top one per cent of earners would contribute more than a quarter of the UK’s income tax receipts³.

Nicholas Added: “High earners are important to the UK’s fragile economy, given the big slice of income tax revenues they deliver, as well as the contribution they make to the economy through spending and job creation. So, it’s certainly concerning that more are considering a move overseas.”

Of the countries identified as tempting for potential movers, France is the most popular – selected by 21 per cent of wealthy people polled – with Spain following behind with 15 per cent and the USA coming third with 11 per cent.

Most popular countries or continents where wealthy people would like to move to:

Country/continent    Percentage of wealthy people who selected each option
France     21%
Spain    15%
USA    11%
Other European (in the Eurozone)    10%
Asia    7%

Lloyds TSB International Wealth provides a range of banking and investment services for wealthy clients around the world. Lloyds TSB has opened over 20,000 international bank accounts in the past 12 months. The bank provides financial guidance and a checklist to help people emigrate at: http://www.lloydstsb-offshore.com.

Notes to editors:

1 YouGov research in January 2011 shows 4.6 per cent of the UK population have over £250,000 of savings and investments. The UK population was estimated at 62,262,000 in mid-2010 by the Office for National Statistics (figure published June 2011). 4.6 per cent of 62,262,000 is 2,864,052.
17 per cent of 2,864,052 is 486,889.
² Institute for Fiscal Studies, 14 September 2011
³ HMRC income tax revenue forecast for tax year 2010/2011. HMRC estimated that the 275,000 individuals who pay the 50p rate would pay £41.4 billion in tax – 25.7 per cent of the UK’s total income tax bill. HMRC expected that there would be 30.6 million taxpayers in 2010/11.

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 1057 adults with savings and investments of over £250,000. Fieldwork was undertaken between the 30th of August and the 2nd of September, 2011. The survey was carried out online.

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