More than 3.5 million lost their ‘dollar millionaire’ status by 2022 — 440,000 of them in the UK and 1.8 million in the US — in the first decline in global wealth since the 2008 financial crisis, research finds

More than 3.5 million people lost their “dollar millionaire” status by 2022 in the first drop in global wealth since the 2008 financial crisis, a study found.

The number of adults with assets over $1 million (£790,000) fell from 62.9 million at the end of 2021 to 59.4 million at the end of last year, according to the Global Wealth Report from Credit Suisse and UBS.

The number of millionaires in the US fell by 1.8 million to 22.7 million, but they are still many more than in any other country, while the number in the UK fell by 440,000 to 2.6 million, the second largest second largest in the world.

The world’s private wealth fell 2.4 percent to $454.4 trillion at the end of last year, when $11.3 trillion was stripped of the value of personal assets due to high inflation and weaker currencies.

The invasion of Ukraine was blamed for the rise in inflation in 2022.

According to separate research for the Bloomberg Billionaires Index, the 500 richest people in the world lost a total of $1.4 trillion by 2022.

The report from Credit Suisse and UBS shows that, measured in current nominal USD terms, wealth per adult also fell by $3,198 to $84,718 per adult.

Much of this decline is due to the appreciation of the US dollar against many other currencies.

Financial assets contributed most to the decline in wealth in 2022, while non-financial assets (mainly real estate) remained resilient despite rapidly rising interest rates

Regionally, the report shows that the loss of global wealth was heavily concentrated in wealthier regions such as North America and Europe, which together lost $10.9 trillion.

Asia Pacific recorded losses of $2.1 trillion.

Latin America experienced a total wealth increase of $2.4 trillion, aided by an average exchange rate appreciation of 6 percent against the US dollar.

In terms of market losses in 2022, the United States leads the list, followed by Japan, China, Canada and Australia.

On the other hand, the largest wealth gains were recorded in Russia, Mexico, India and Brazil.

In terms of wealth per adult, Switzerland continues to top the list, followed by the US, Hong Kong SAR, Australia and Denmark, despite significant declines in average wealth from 2021.

World private wealth fell 2.4 percent to $454.4 trillion at the end of last year (stock image)

Along with the decline in total wealth, overall wealth inequality also fell in 2022, with the wealth share of the global top 1 percent falling to 44.5 percent.

According to the report’s projections, global wealth will increase by 38 percent over the next five years, reaching $629 trillion by 2027.

Banks expect global wealth to grow 38 percent to $629 trillion by 2027. The growth of middle income markets will be the main driver of global trends.

The number of millionaires will rise to 86 million people.

Nannette Hechler-Fayd’herbe, Chief Investment Officer for the EMEA region and Global Head of Economics & Research at Credit Suisse, said: ‘Wealth development proved resilient during the COVID-19 era, growing at a record pace in 2021 But inflation, rising interest rates and currency depreciation caused a change in 2022.’

Anthony Shorrocks, economist and author of the report, said: “Much of the drop in wealth in 2022 was driven by high inflation and the appreciation of the US dollar against many other currencies. If exchange rates were held constant at 2021 rates, total wealth would have increased by 3.4% in 2022 and wealth per adult would have increased by 2.2%.

“This is still the slowest increase in wealth at constant exchange rates since 2008. Keeping exchange rates constant but accounting for the effects of inflation results in a real wealth loss of -2.6% in 2022.

Similarly, financial assets contributed most to asset declines, while non-financial assets (mainly real estate) remained resilient despite rapidly rising interest rates. But the relative contributions of financial and non-financial assets could reverse in 2023 as house prices fall in response to higher interest rates.”