The richest in society are getting increasingly wealthy despite the impact of the credit crunch, research by investment bank Merrill Lynch and consultant Capgemini has revealed.
The richest in society are getting increasingly wealthy despite the impact of the credit crunch, research by investment bank Merrill Lynch and consultant Capgemini has revealed.
The company's annual world wealth report shows that the wealth of the world's high-net-worth individuals (HNWIs) - those with investable assets of more than $1m (£508,000) excluding their home - increased 9.4% to $40.7 trillion (£20.7trn) last year.
The number of individuals in this bracket increased 6% to 10.1 million, showing that those who are already wealthy are getting even richer. The average HNWI now has assets of some $4m.
The study examines economic growth, market movements and income distribution in making its conclusions and sharp changes in exchange rates should not impact on its conclusions, the authors say.
But there are signs that economic conditions in the UK and other mature economies are taking their toll.
Nick Tucker, market leader for UK & Ireland at Merrills's global wealth management division, said: "The number of HNWIs in the UK rose 2.15% to 495,0000, driven primarily by strong economic (ie real GDP) growth of 3.2%, up from 2.9% in 2006."
These means that around 5% of the global HNWI population lives in the UK, ranking it fourth in the world although China is expected to overtake soon, perhaps even by the end of 2009.
"Growth in HNWIs was much less than the rise of 8.1% seen in 2006 but better than the even lower growth seen in other mature economies such as France and Germany," Tucker added.
The rise in British HNWIs came despite a 15% fall in UK market capitalisation, important to wealthy people who typically have a third of their assets in equities, compared to a 24% increase in 2006.
But the greatest rise in wealthy individuals came from emerging economies. The fastest growth was in India, where the number of HNWIs rose 22.67% to 123,000, ahead of China, up 20.3% to 415,000 and Brazil up 19.1% to 143,000.
Generally it is in the resource-rich regions where the number of wealthy people has risen most. In Africa the numbers are up 10% on last year, the Middle East 15.6% and Latin America 12.2%, compared to 3.7% in Europe and 4.2% in North America.
But one factor that could cut the wealth growth among society's richest is inflation.
Wealthy individuals spend a significant portion of their income on what Merrills terms "investments of passion" such as art collections, luxury vehicles, yachts, wine and so on. These increased in price by 6.2% last year compared to consumer price inflation of 2.2%.
Tucker said: "Clearly the cost of living extremely well is rising significantly faster than everyone else's inflation rate."
The survey predicts that the financial wealth of the richest in society will reach $59.1trn (£30.1trn) by 2012, an annual growth rate of 7.7%.
