Undeniably, the pandemic has drastically changed the world we live in. And here in the UK, we have seen a significant impact on both the economy as a whole, and on our personal circumstances.
For high-net-worth individuals (HNWIs), it appears COVID-19 has been a catalyst for change, in their lifestyle choices and the way they spend their money.
This has been concluded from research conducted by Saltus — a firm offering a range of investment management and financial planning services. The results of the survey are explored in the Saltus Wealth Index, and included the responses of over 1,000 individuals with investable assets of at least £250,000.
The aim of the research was to discover the views of HNWIs, with regards to the financial prospects of the country as a whole, as well as their own personal lives.
HNWIs change their lifestyle
The research found that HNWIs considered COVID-19 to be the biggest threat to their wealth. Almost a third (31%) of respondents cited the pandemic as having the greatest impact, followed by inflation and interest rates.
Despite this, it seems the pandemic has caused respondents to reassess what is worth spending their money on. A highlight from the survey found that 25% of HNWIs have become even more charitable post-COVID. This rises to almost one in three (32%) when focusing just on those aged between 35 and 44.
More than a third (34%) of respondents revealed they had spent their money on home improvements, as a direct result of the pandemic, and more than likely because of the lockdowns endured.
30% of HWNIs said they have learnt a new skill, whilst others are now focusing on spending more time with family. 24% of those surveyed said they now spend more time with children and grandchildren, in the aftermath of the pandemic, and 28% prefer to spend more time with their spouse.
However, the research discovered that this seems to vary between age brackets. In total, 21% of HNWIs have made no lasting changes to their lifestyle, post-COVID. Breaking this down by age group, 62% of those aged over 65 said they had not made any changes.
This is significantly more than respondents aged 35 to 54, with only 11% believing they haven’t made any lasting changes to their lifestyle because of the pandemic.
HNWIs spending more on experiences
The survey conducted by Saltus, also found that experiences dominate HNWIs spending priorities, despite not always being seen as a good use of funds, in terms of investments.
Majority of HNWIs (43%) have splurged their money on holidays, eating out and going to theatre, whereas only 20% have spent their money on property. In addition, one in ten (10%) spend their money on good quality food and drink, and 56% of respondents with children either already send them to private school or intend to.
It seems that HNWIs are more inclined to spend their money on experiences over material goods. However, just 3% of those surveyed cited experiences as a worthy investment, compared to 81% who said assets.
Views begin to change from an investment perspective, with HNWIs believing that physical assets represent a better use of their money. The survey also found that older respondents prioritise expenditure on property, while younger generations spend more on clothes than anything else.
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As we adapt to a post-pandemic world, and the economy recovers, it begs the question of whether these lifestyle changes and spending habits amongst the HNWIs are likely to remain.
Disclaimer: Information is correct to the best of our understanding as at the date of publication. Nothing within this content is intended as, or can be relied upon, as financial advice. Capital is at risk. You may get back less than you invested.
