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UK Millennial, Gen Z Millionaires Double
24 September 2023
The number of UK Millennial and Generation Z millionaires has reached a record high of 2,000, having doubled from the previous year, Bowmore Wealth Group has found. Gen Z’s economic clout is the fastest growing among the generational groups and their income is expected to rise fivefold by 2030 to $33 trillion as they join the workplace, accounting for more than a quarter of global income and surpassing Millennials’ income by 2031, according to a 2020 Bank of America report.
Fifty thousand Millennial (born between 1981 and 1996) and Gen Z (born between 1997 and 2012) taxpayers declared income of more than £150,000 in 2019, compared with 39,000 the previous year, a rise of 28 per cent. The income figures are the latest data available, the company said.
The jump in high-earning Millennials is due largely to a sharp increase in pay for workers in the tech/fintech sector (especially those with shares or options), and to a boom in Millennial entrepreneurship and high-paid areas of financial services such as private equity.
Millennials have continued to be attracted to starting up their own businesses, partly due to high-profile success stories from their generation. This includes Gymshark founder Ben Francis and Kristo Käärmann, founder and CEO of money transfer giant Wise.
The number of high earners at a younger age in other areas, such as footballers and social media influencers, is also rising, Bowmore said.
The figures mean that wealth managers must adapt and stay on top of their digital game to deliver the investment experience and expertise that the new generation expects, essentially more data and better experience.
“Millennials are earning more than ever before. They should be putting away as much as they possibly can now to avoid the stress of having to catch up on their retirement savings later down the line,” Mark Incledon, chief executive officer of Bowmore Wealth Group, said. “During lockdown we’ve seen that more Millennials are considering their financial future and putting money to work by investing. Instead of putting all their assets into risky assets like cryptocurrencies or meme stocks, it is fundamentally important they follow simple, straightforward steps when investing. This includes having a diversified portfolio across geographies, sectors and asset classes.”
The firm said that Millennials could take advantage of tax reliefs whilst they are still available, pointing out that this could change with the threat of tax changes to recoup COVID-related spending, which will leave the future of some tax reliefs hanging in the balance.
Millennials should also make a “conscious effort” to save for retirement and maximise the use of tax reliefs, given that their earnings may prove to be more volatile than previous generations, as they tend to switch jobs more frequently. Savers should make full use of ISAs, which allow individuals to save up to £20,000 per year tax-free. High-earners with a higher risk appetite could also consider using tax reliefs by investing in growth companies through VCTs, where investors can claim 30 per cent income tax relief on investments of up to £200,000, the company said.
In 2019, 17 million Millennials dominated the job, housing and money market. While they currently hold a smaller percentage of investable assets than Baby Boomers and Generation X, estimates suggest that Millennials are due to receive more than $68 trillion of inheritable wealth by 2030, according to business software firm Xpedition writing for this publication.
The number of UK Millennial and Generation Z millionaires has reached a record high of 2,000, having doubled from the previous year, Bowmore Wealth Group has found.
Gen Z’s economic clout is the fastest growing among the generational groups and their income is expected to rise fivefold by 2030 to $33 trillion as they join the workplace, accounting for more than a quarter of global income and surpassing Millennials’ income by 2031, according to a 2020 Bank of America report.