The number of millionaires in the United Kingdom has fallen to its lowest level in nearly two decades, reflecting the impact of inflation, declining property values, and tax policy changes that have prompted some wealthy individuals to leave the country. A report from the Adam Smith Institute (ASI), a think tank, estimates there are currently 442,000 people with wealth exceeding £1 million in the UK, marking a 7% decline from the previous year and the lowest figure since the 2008 financial crisis.

The ASI attributed the reduction in millionaires primarily to the fall in property prices and an outflow of affluent residents following Labour’s alterations to the non-domiciled tax regime. Non-doms are UK residents who claim tax residence abroad, a status that has been increasingly restricted. Official data from Her Majesty’s Revenue and Customs (HMRC) showed that the number of non-dom residents dropped by 30% since 2014-15, reaching about 60,700 in the 2023-24 tax year. This tightening of non-dom rules began under Conservative governments but was accelerated by former Chancellor Rachel Reeves.

Mitchell Palmer of the Adam Smith Institute warned that the shrinking population of millionaires could signal broader economic challenges, noting that the departure of wealthy individuals may reduce capital available for British businesses, limit international connections, and weaken entrepreneurial momentum.

The report’s findings emerge amid ongoing discussions about introducing a wealth tax in the UK. Andy Burnham, the Mayor of Greater Manchester and a prominent Labour figure, has been linked to proposals for a wealth tax, a policy supported on the left to address economic inequality. Burnham has not made formal commitments, but Prime Minister Rishi Sunak acknowledged in a recent interview that Britain currently "overtaxes labour and undertaxes wealth," and did not rule out the possibility of a wealth tax.

Steve Rotheram, Mayor of Liverpool and close ally of Burnham, also indicated openness to exploring a wealth tax as a revenue source for social care and defense spending. Speaking on a podcast, he noted there is some support among wealthy individuals for additional taxation aimed at addressing fiscal challenges. However, the Adam Smith Institute cautioned that implementing a wealth tax could further accelerate the departure of wealthy taxpayers.

In a separate but related development, the UK government has sought to increase domestic investment in British businesses through pension funds. Under the Mansion House Accord, signed by 17 major pension funds, the collective commitment is to channel up to £25 billion into unlisted UK companies, property, and infrastructure by 2030. The goal is for 10% of workplace pension scheme assets, equating to as much as £50 billion, to be allocated to private market assets, with roughly half going to UK-based projects.

However, progress has been complicated by legal constraints, as pension funds must prioritize their fiduciary duty to members. After a process involving the House of Lords, legislation now allows the government to compel pension funds to invest in UK assets once, post-2028, subject to regulatory conditions. Until then, the investment effort is likely to rely on voluntary participation by funds seeking competitive returns, including opportunities in startups and scale-ups.

Chancellor John Healey emphasized Britain’s strength in generating innovative companies but noted a shortfall in domestic capital supporting their growth. He highlighted the UK’s position as the world’s third-largest venture capital market and underscored plans for a new £1 billion fund intended to encourage British investment in scaling companies, aiming both to retain profits domestically and enhance pension saver returns.