High-net-worth (HNW) investors have stated that taxation and government policy are the biggest threats to their wealth, Wealth Club has found.

The non-advised investment services firm’s latest research found that 47% of HWI individuals, whose average wealth is around £4.5m, cited higher taxes as the biggest threat, while 26% chose government policy.

This compares to just 9%, who listed geopolitical events as the biggest threat, as well as slow economic growth (6%) and higher inflation and volatility (3%).

Wealth Club found that investors are pessimistic on the economic outlook for the UK in general, on taxation, interest rates and inflation specifically.

Seven in 10 (70%) said they were not very confident or not confident at all about the UK economy over the next 12 months.

Almost three in five (58%) expect the Bank of England to raise interest rates in the next year, while 63% believe inflation will rise in the same period.

Nearly all (97%) of the HNW individuals surveyed believe that tax will definitely or probably increase over the next 12 months, with 22% concerned about a rise in inheritance tax and 21% are worried about the introduction of a wealth tax.

Founder and CEO at Wealth Club, Alex Davies, stated: "It is deeply worrying that millionaires now see tax and government policy as a bigger threat to their wealth than inflation, market volatility or geopolitical events. That is an extraordinary finding and suggests confidence in the UK's economic direction is already at a very low ebb.

"Investors understand that markets rise and fall. They can diversify, invest for the long term and take sensible steps to make their finances more tax efficient. But there is only so much individuals can do when the perceived threat to their wealth comes from government policy itself.

"Governments inevitably face difficult choices and must balance the public finances. However, they should also recognise that every increase in the tax burden and every policy change that makes Britain a less attractive place to save, invest and build businesses risks further undermining confidence. That should concern ministers because confidence is ultimately what drives investment, entrepreneurship and long-term economic growth."

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