Entrepreneurs are more likely to consider property investment rather than a pension to build their wealth, according to research from Brown Shipley, a Quintet private bank.
The survey among entrepreneurs and wealthy individuals in the UK found that entrepreneurs are more likely than wealthy individuals overall to have amassed wealth through investment in property, and less likely to have done so through a pension. Almost a third of entrepreneurs (30%) state that property investment is a main reason for their wealth, compared to 21% for wealthy Brits overall. While 44% of wealthy individuals in the UK highlight their pension as a main reason for their wealth, this falls to 28% for entrepreneurs.
Property investment (30%) and inheritance (31%) are the second most cited reasons for wealth among entrepreneurs, preceded only by salary, for which around half of entrepreneurs (51%) say is a main reason for their wealth compared to 64% for wealthy Brits overall. Over a quarter (27%) of entrepreneurs say that entrepreneurialism and proceeds from a business are a key reason for wealth. More than one in six entrepreneurs (15%) say that a lottery win or gambling has had a material positive impact on their levels of wealth, almost double the amount for wealthy individuals in the UK overall (8%), suggesting they may take a different approach to risks with their finances.
Just over half of entrepreneurs (51%) plan to use their wealth to provide an income in retirement, versus 61% for wealthy individuals on the whole.
Gordon Scott, Head of Client Solutions at Brown Shipley, said: “
There is an obvious additional financial risk that comes with working for yourself, with capital tied up in the business and director salaries dependent on business performance, which may explain why many entrepreneurs look to bricks and mortar for broader wealth generation. For the same reason, some entrepreneurs might be less willing to put their money into other companies through a pension, which will tend to be primarily invested in stocks and bonds.
“Working for yourself can mean that some of the more traditional ways of saving for the future and amassing wealth – such as a pension – can be forgotten. Entrepreneurs, by their nature, will have a lot of their potential wealth tied up in their business endeavours. Business planning can often overtake personal wealth planning, but it is important to ensure the two align. We encourage our entrepreneur clients to look at their wealth and plans holistically, and ensure they are managing risks and making the most of tax allowances where appropriate to do so, such as those offered through pensions.”
This article contains general information only and is not intended to constitute financial or other professional advice or a recommendation that any recipient of this information should make any particular investment decision. Please remember:
The information contained in this press releases is intended solely for journalists and should not be used to make financial decisions.
Notes to Editors
- Investing puts your capital at risk
- Tax planning is not regulated by the Prudential Regulation Authority or the Financial Conduct Authority
Opinium Research asked a representative sample of 4,002 UK adults between 30th
November to 3rd December 2021. 813 of these have estimated financial assets in excess of £100,000. These are described as ‘wealthy’ in the press release. A further 105 of these wealthy individuals are entrepreneurs.
About Brown Shipley, a Quintet Private Bank
Brown Shipley is a wealth manager offering clients informed financial advice and tailored services on all aspects of wealth planning, investment management and lending. Brown Shipley has offices in London, Manchester, Birmingham, Cambridge, Leeds, Edinburgh, Norwich and Nottingham; and a heritage dating back to 1810.
Brown Shipley’s parent company is Quintet Private Bank, which from Luxembourg heads a major European network of private banks and wealth managers.
Brown Shipley is a trading name of Brown Shipley & Co Limited, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority. Registered in England & Wales No. 398426.
For further information about Quintet Private Bank, please visit: www.quintet.com
For further information, please contact:
Maria Shum at Brown Shipley, a Quintet Private Bank
Tel: 0161 214 6601 / 07866 791362
Gilly Lock at Powerscourt Group
Tel: 07711 380 007