The large majority of the UK’s wealthy are nervous about their finances and over half are thinking about moving abroad to ease concerns. Where has this come from? What can the UK do?

Research from private bank Arbuthnot Latham showed that 81% of the UK’s most affluent people are stressed about their finances.

Largely, the concerns revolved around future planning and retirement as 51% were worried about maintaining their lifestyle in later life.

In addition, 39% were worried about the value of their investments and 25% pondered about providing for future generations.

However, 24% were worried about the tax burden of the UK and 22% were nervous about becoming a victim of fraud.

As a result, nearly three in five wealthy individuals (59%) in the UK are considering relocation abroad, the main reason (36%) being a desire for an improved standard of living. This was followed by lower property costs and benefitting from a more favourable tax regime with 28% and 21% of respondents respectively.

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Eren Osman, managing director, wealth management, at Arbuthnot Latham said: “One of the best pieces of advice you could give, or receive, is to start saving for retirement as soon as possible. This is one of the cornerstones of long-term financial wellbeing.

“The effect of compounding – assuming annual growth – means you have a better chance of exponentially growing your retirement pot over time if you start saving at an early age.

“This is even more important because those planning for their retirement in 2024 are reliant on what provisions they can make themselves. The state age of retirement keeps increasing and most people nearing retirement do so without the guaranteed income stream of a final salary pension.

“My message is clear: if you want a comfortable retirement, it is up to you. Do as much as you can, as early as you can.”

So what do we do next?

Speaking to PBI, Kevin Barrett, managing director, banking, at Arbuthnot Latham, spoke on how the sector can ease the concerns of their clients.

PBI: How are firms like Arbuthnot Latham easing these concerns?

Kevin Barrett (KB): Personal wellbeing comes from the reassurance of knowing you are on the right financial path and that you can manage unexpected events or changes to your circumstances.

With us as trusted advisors, our clients know they can reach their dedicated relationship manager in person, over the phone, or via email. This is what personalised service means; that ability to truly understand your client’s concerns, their ambitions, and their circumstances, and then respond in a way that is timely and constructive.

Technology has made self-service so easy, but there is still such an important role for in-person interaction with someone who listens and cares. The support we provide gives clients reassurance that help is there, in the good times, the bad, and everything else in between.

PBI: Does this level of concern mean that engagement between clients and advisers has risen? Or are they keeping concerns to themselves?

KB: Over the past few years, we have noticed a change in the kinds of concerns people raise and there has been an increase in the volume of those conversations as well. It’s to be expected.

Which ever way you look at it, it has been quite a tumultuous time. Even before covid, there was a post-2016 degree of macroeconomic uncertainty. Then the global pandemic hit. Now people are contending with a cost-of-living crisis and high interest rates closer to home, and further away, heightened conflict.

Throughout all of this, we have been proactive with clients, staying in close contact to ensure expectations are understood and met. Whether this is restructuring commercial loans, communicating about the latest rate increases on our deposit accounts, adjusting long-term investment portfolios, or tweaking personalised wealth plans.

What I would say it that we haven’t always needed to increase the volume of client interactions, but our clients appreciate the proactivity and it often leads to discussion of matters not yet on their radars.

PBI: Does Arbuthnot see this level of concern increasing or decreasing in the near future?

KB: That’s the million-dollar question. When will things settle down? I am sure many of us have taken a moment at the passing of a new year recently and thought ‘well surely the next 12 months can’t be as challenging as the last’, and they often prove to be just that.

I think people will always have financial concerns, and I also think events of the past few years will last long in our collective memory. If you speak to someone paying a mortgage in 1976, 1980 or 1990, they will tell you about interest rates of more than 14%. If you speak to a business owner about life after 2008, they will be able to set out clearly the impact of recession. These shocks have a big personal impact and affect people’s longer-term biases and their subsequent behaviours.

While you cannot allay all fears, nor heal all scars, maintaining a long-term focus means being well-prepared to weather short-term volatility. It is easy to focus too much energy on the immediate future, but often when you look at the evolution of a financial plan over a longer timeframe, the bumps often even out. Again, this is a financial wellbeing point, know your objectives, take a long-term view in achieving them, revisit those objectives if circumstances change, and have the right experts at your side to listen, advise, and guide the process.