IHT, gifting and not knowing how much is enough to maintain their lifestyles in later life are the top three financial concerns of wealthy Britons, according to new research from RBC Wealth Management (part of the Royal Bank of Canada).
Across generations, IHT remains the number one concern despite ongoing speculation of a potential tax cut, jumping from 27% in the prior year’s survey to 35% (equivalent to a 12% and 16% year-on-year rise for 25-34 year olds and 55-65 year olds respectively).
The poll also found that wealthy Brits are concerned about gifting without losing control or giving too much too soon, particularly among 35-54 year olds (which saw the sharpest year-on-year rise from 16% to 23%), and women (climbing from 20% to 29%).
Furthermore, not knowing how much is enough to maintain lifestyles in later life is a concern for respondents, with those closest to retirement ages most concerned (31%), and younger, pre-retirement respondents increasingly worried (24%) compared to the prior year (20%).
The survey was commissioned by RBC Wealth Management and conducted in collaboration with Kantar Media in October 2023 with 600 respondents with a minimum of £500,000 in investible assets.
Nick Ritchie, senior director of wealth planning at RBC Wealth Management said: “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.”
Ritchie continued: “In this environment, establishing a financial plan is of the utmost importance but so too is regularly reviewing it. At RBC, we recognise the difficulty in juggling future needs and present pressures, particularly for the younger generation who may lack the framework or time to dedicate to future planning.
"We’ve implemented various initiatives to enhance financial education and develop a consistent, repeatable approach to financial planning that enables our diverse clientele to make informed decisions and address wants and needs in the present without compromising long-term financial security.”
Changes to the capital gains tax rate is another top concern for wealthy respondents, with those in pre-retirement ages (aged 55-65) most concerned (27% in 2023 vs 14% in 2022). The survey showed that male respondents are more worried (26%) compared to female respondents (19%).
The research by RBC Wealth Management also found that almost 30% of women have hesitated to apply for wealth management products due to a lack of understanding, compared with only 10% of men, with women also a lot less confident than men when it comes to investment management (81% of women say they would benefit from more guidance compared with 67% of men) and diversifying assets (71% of women say they require guidance compared with 66% of men).
Annabel Bosman, head of relationship management at RBC Wealth Management said: “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.
“However, the fact that three times more women than men hesitated to apply for wealth management services in 2023 because of a lack of understanding cannot be ignored, particularly in light of the bumpy road ahead of us. At RBC we aim to bridge this gap by demystifying the complexities of wealth and investment management by offering accessible, gender-inclusive services that empower women of all age groups to efficiently manage, grow and protect their wealth.”
