According to new study from RBC Wealth Management (a division of the Royal Bank of Canada), the primary financial concerns of wealthy Britain in 2024 are inheritance tax (IHT), gifting, and not knowing how much would be enough to maintain their lifestyles in later life.
Why is IHT a concern in 2024?
Across generations, despite continuous talk of a prospective tax decrease, IHT remained the top issue, up from 27% in the previous year’s study to 35%.
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The research also discovered that rich British people are anxious about gifting without losing control or giving too much too fast, notably among 35-54-year-olds (which witnessed the largest year-on-year growth from 16% to 23%) and women (which increased from 20% to 29%).
Additionally, respondents expressed anxiety about not knowing how much is sufficient to maintain lifestyles in later life; those who were closest to retirement age had the greatest level of concern (31%).
Based on the survey, respondents who are younger and not yet retired are becoming more concerned (24%) about this issue than they were last year (20%).
More concerns
Another major worry among wealthy respondents is the potential change in the capital gains tax rate. Those in pre-retirement (ages 55–65) are the most apprehensive (27% in 2023 vs. 14% in 2022).
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By GlobalDataMoreover, the poll revealed that male respondents are more concerned (26%) than female respondents (19%).
Lastly, the findings of RBC Wealth Management research demonstrated, nearly 30% of women have been hesitant to apply for wealth management products attributed to a lack of comprehension compared to only 10% of men.
Women feel less assured than men when it comes to investment management (81% of women say they would benefit from more guidance, compared to 67% of men) and diversifying assets (71% of women say they require guidance, compared to 66% of men).
Nick Ritchie, senior director of wealth planning at RBC Wealth Management stated: “The survey results point to the wealthy re-evaluating later life priorities and wealth stewardship, a trend likely prompted by the UK’s uncertain political and economic future, which could potentially alter the future landscape of intergenerational transfers. What is also interesting is that we’re seeing that the younger wealthy are showing the highest level of concern over wealth transfer, according to the research.”
“Against the backdrop of rising geopolitical tensions, increased volatility and higher for longer interest rates, we expect to see the wealthy continue to seek guidance from their wealth manager to build investment strategies and comprehensive plans to support their financial future,” says Annabel Bosman, head of relationship management at RBC Wealth Management.
