An annual income of £213,000 has been declared the benchmark for ‘wealthy‘ according to new research from HSBC.
HSBC UK’s new report ‘Your Money’s Worth: Defining Wealth in 2025’ revealed nine in 10 high earners do not consider themselves wealthy, with only one per cent of the population identifying as so.
The top four per cent of earners identify an income of £724,000 as necessary to consider themselves wealthy.
Speaking to City AM, HSBC’s head of premier wealth Xian Chan said there was a “perception gap” around wealth.
“One of the things that the study has shown us is that there is one part of the income statement, obviously how much you earn.
“And then there is the other on how much you spend.”
Chan explained the reason behind the perception gap was “lifestyle inflation,” where spending rises with increased pay.
“You may be earning a lot of money, or a significant amount of money, but you’re probably also spending a significant amount of money.”
He told City AM subjective decisions on necessities and luxuries that were in “the eye of the beholder” create a dispersion and this led to high earners saying they do not “feel wealthy”.
Regional and generational divides uncovered
The perception gap extends across the country, with Londoners on average considering £289,000 wealthy and those in the North East saying £80,000.
Chan said this was in part down to the differernt cost of living in these areas, contributing to another layer of dispersion.
The report indicated Gen Z was also redefining perceptions of wealth, with nearly half considering wealth in non-material terms.
“The lines of wealth are constantly moving,” he said, with Gen Z also considering a good work-life balance as a strong signifier of wealth.
Chan added it was a “very important” responsibility for banks to meet the evolving needs of modern generations.
Emerging threats from the capabilities of challenger banking giants such as Monzo, Revolut and Monument has led the traditional banks to up their game on digitalisation.
Chan said for HSBC “It was important to be on top of the clients, so if our clients prefer digital journeys, we have select digital journeys that are available for them.”