Millionaires want to leave UK due to taxation and better living abroad

More than half of the UK's millionaires have fled or are thinking of fleeing the country because of high taxation and perceived better living standards abroad, according to a new study.

The weather also puts them off and overall only 44% are certain of remaining in the UK, the study of more than 500 UK based millionaires from investment firm Skandia UK shows.

But it also found that only 2% were thinking of moving to a tax haven such as Switzerland or the Cayman Islands. Preferred destinations were France, the United States, Spain and Australia.

‘Our survey seems to indicate that the UK's wealthiest really are saving for a rainy day and will seriously consider moving to sunnier climes if storm clouds gather in either economic or meteorological terms,’ said Jo Rimmer of Skandia.

The research also found working hard and investing wisely is a surer way to become a millionaire than being born into money. More than two thirds of the high net worth individuals surveyed made their fortunes from employment income, investments or as the result of selling their business venture. Only 14% of those surveyed saying their wealth comes solely from inheritance income.

Meanwhile, the latest investment trend survey by Skandia shows the level of sales in cash and money market funds has seen a 52% fall in just one year. In the second quarter of 2010 cash and money market funds accounted for 12.19% of sales via the Skandia Investment Solutions platform, but now account for just 5.83%.

UK Fixed Interest funds remain the biggest selling sector although sales levels have remained broadly flat over the past year. UK Equity funds have picked up some of the sales lost by cash funds, increasing in popularity by 17% to take second spot and the third most popular sector is the Global Specialist sector which has also continued to grow in popularity.
 
Sentiment towards Japan has improved following recent events but sales figures for the sector remain bottom Europe and the Far East have also seen a rise in their proportion of sales.

‘The decline in cash and money market funds shows a steady return in investor confidence. This is a far cry from the declining confidence levels seen when the stock market dipped at the end of 2008, when over one fifth of sales were in cash and money market funds. As investor confidence improves, portfolios become more heavily weighted towards equities and overseas investments,’ said Graham Bentley, Skandia’s investment expert.

‘Interestingly, sales in the Global Specialist sector continue to grow, aided in part by the growth in demand for gold and natural resources,’ he added.