Switzerland: A new report has stated that newly emerging billionaires have collected a significant portion of their wealth from inheritances rather than through their own work and entrepreneurship.
The report by Union Bank of Switzerland (UBS) noted that of the 137 people who became billionaires in the 12 months to April 2023, 53 inherited a combined $150.8 billion from their families. This exceeds the combined $140.7 billion created by “84 new self-made” billionaires over the same period.
The bank noted that, for the first time in the nine-year span of its annual report focusing on the wealth of the wealthiest 0.00004 percent of society, “the next generation of billionaires accumulated more wealth through inheritance than entrepreneurship.”
Mr. Benjamin Cavalli, the head of strategic clients at UBS Global Wealth Management, commented that “this is a theme we expect to see more of over the next 20 years, as more than 1,000 billionaires pass an estimated $5.2 trillion to their children.”
The report also observed that the “growing significance of these families can be seen across all major geographical regions.” In Asia-Pacific, inheritors’ average wealth was $2 billion, compared with $1.6 billion for entrepreneurs. In the Americas, the inheritors were worth $2.2 billion versus the entrepreneurs’ $1.5 billion. In Europe, the Middle East, and Africa (EMEA), the inheritors’ average wealth is $4.4 billion—double the entrepreneurs’ $2.2 billion.
The report comes at a time when there is a growing public debate about the role of inheritance tax in helping to pay for public services and to assist financially struggling families.
Overall, the number of billionaires around the world increased by 7 percent to 2,544, and their combined wealth increased by 9 percent to $12 trillion, UBS said. That is about four times more than the GDP of the UK.
The bank warned that “as increasing numbers of the early tycoons age, responsibility is beginning to pass to their heirs, fostering potential future multigenerational billionaire families. This great wealth handover has long been anticipated, but the 2023 edition of the UBS Billionaire Ambitions report shows that it’s under way and gathering momentum.”
“During the next 20 to 30 years, over 1,000 of today’s billionaires are likely to transfer more than $5.2 trillion to their heirs,” the report further added.
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