A quarter of Britain’s richest families are weighing up leaving the country as fears mount over Labour’s tax raid on private schools and speculation of further levies in next month’s Budget.
A new survey of high-net-worth individuals by wealth manager Saltus reveals widespread disillusionment among affluent households, with VAT on private school fees cited as a key factor driving many to consider a move abroad. The findings underline how sharply confidence has deteriorated among wealth creators, investors and business leaders since last year’s record tax-raising Budget.
Mike Stimpson, a partner at Saltus, said sentiment has barely recovered, and the looming November Budget risks dealing another blow. “Whether it’s capital gains tax, income tax or inheritance tax, high net worth individuals are braced for further changes at the autumn Budget given the Chancellor’s limited fiscal room for manoeuvre,” he said. “This cohort are the wealth creators, investors and employers who drive economic growth. If their confidence is undermined by continual uncertainty, that has consequences for everyone.”
The Saltus survey defines a high-net-worth individual as someone with investable assets of at least £250,000. Among respondents, one in eight said Britain was no longer a good place to start a business, while 16 per cent objected to inheritance tax reforms and 14 per cent said the UK was no longer attractive for raising a family.
The backlash against Labour’s decision to impose VAT on private school fees has been particularly fierce. Almost half of those who voted for Labour at the last election said they now regret doing so because of the policy. One in seven wealthy parents said it was a key reason for considering leaving the country, while a fifth reported they had already pulled their children out of their former schools.
For those who have stayed, many have been forced to take drastic steps to cover the extra costs. According to Saltus, 71 per cent of parents have made sacrifices to pay the higher fees: one in ten have remortgaged, another tenth have taken out loans, and one in eight have moved house to free up equity. A quarter have cut pension contributions, while a third paid school fees in advance before VAT was applied.
Alex Pugh, a chartered financial planner at Saltus, said families were increasingly transferring children to the state sector, often grammar schools, at natural transition points such as secondary school or sixth form. “These decisions are typically not knee-jerk reactions to the higher fees, but rather carefully planned moves at times when changing schools is least disruptive to a child’s education,” he explained.
The findings highlight the pressure facing Chancellor Rachel Reeves as she prepares her first Budget. With a £30–40 billion black hole in the public finances, speculation is rife that she could raise further taxes on high earners, investors and landlords. But Saltus’s research suggests that uncertainty over such measures is already fuelling discontent — and driving some of Britain’s wealthiest families to consider whether their future lies elsewhere.
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Wealthy families plot exodus as Labour’s school fees tax sparks anger
