How the rich invest their money

Who the wealthy really are

In the UK, the top 10% of households hold £1.2 million or more in net wealth – that's the combined value of everything they own, including property, pensions, savings, and investments, minus debt.

This isn't the billionaire yacht class – more like the kind of person who has a holiday home, a membership at a fancy golf course, or perhaps just a modest property in central London.

Meanwhile, you need to crack £3.1 million in total wealth to become a member of the top 1%.

At the truly stratospheric end, you've got what HMRC categorises as "ultra high-net-worth individuals" with £10 million or more – that's Premier League footballer money, without the hamstring injuries.

Today, we're going to look at how the rich invest their cash.

How rich portfolios differ

The median UK household holds around £10,400 in financial assets. That includes everything financial that you could access quickly if you wanted to – savings, ISAs, shares, bonds, but not pensions, minus debts.

Median household wealth overall stands at just under £300,000, which includes property, pensions and physical items.

💷 If you want to see how you stack up, check out our 2025 British Savings Report 💷

Banks vs stocks

For the poorest tenth of households, 73% of their financial assets sit in zero-interest accounts.

Only 6% goes into anything remotely risky, like stocks. That's not necessarily bad judgement – when your total pot is small, holding a few months' income in cash for emergencies means most of your money is parked, not growing.

Compare that with the top 10%. These households have over £1.2 million in total wealth – and typically hundreds of thousands to invest. Only 21% of their financial assets are kept in zero-return assets like cash:

The rest is spread across assets that actually earn something: property, shares, and fewer bonds.

Traditionally, people are told to shift into bonds as they get older to reduce risk. But wealthy households don't always follow that pattern. A US-based study found that as total wealth increases, the share of "risky" assets in a portfolio – including private equity and venture capital – also increases, rising from around 70% for millionaires to 80% for those worth over $100 million.

And while only about 10.8% of UK adults own shares directly, for the wealthy, equity investments are central.

Property

You might assume the rich get richer by snapping up property. And yes, wealthy households are more likely to own multiple properties – from buy-to-lets to London flats and country houses. However, as a share of their total wealth, property actually shrinks the richer they get.

For households worth around £250,000, property typically makes up half of their net wealth. But for those with £5 million or more, it drops below 20%. That's not because they own less, but because business assets and financial investments grow much faster.

Cars and contents

Physical goods like cars or home contents, which make up a large share of net worth for poorer families, barely register in a millionaire's balance sheet. After all, a £20,000 car is a big deal if that's half your savings. But for someone with £5 million, it's background noise.

Luxury items

Whisky has become the luxury asset of choice for the wealthy. A KPMG survey found 27% of high-net-worth individuals plan to invest in it within three years, more than art (26%), jewellery (20%), wine (15%), or classic cars (14%).

It doesn't take much digging to find out why. The Knight Frank Luxury Investment Index, which tracks ten high-end assets, shows whisky up 280% over the past decade – the only item to beat the S&P 500's 208% return. The rest lagged behind: wine rose 146%, watches 138%, art 105%, and so on.

There's no definitive UK stat on how many wealthy people invest in these assets, but when a classic car or six-figure painting is the minimum entry point, it's safe to conclude the participation skews rich.

Cryptocurrency

Crypto might be commonly associated with get-rich-quick schemes and scams these days, but one survey suggests the wealthy are over three times more likely to own it. After all, rich investors can afford to ride the crypto rollercoaster.

Saltus, a UK wealth manager, surveyed individuals with more than £250,000 in investable assets and found that 40% currently hold crypto, with another 46% planning to invest.

Compare that to the general population: the Financial Conduct Authority (FCA) reports only 12% of UK adults own crypto, a figure that's risen slightly from 10% in previous years.

Private businesses and venture capital

One of the clearest dividing lines between the wealthy and everyone else is business ownership.

Most Brits don't hold any business equity, beyond the odd bit of crowdfunding or a small family enterprise.

But among the UK's richest households, business is a major asset class. In fact, households with over £2 million per adult hold around 13% of their total wealth in business assets. For those with over £5 million, that figure jumps to over 40%.

This equity often comes from owning private companies, shares in family businesses, or investments in private equity funds. These assets are illiquid (you can't sell them tomorrow), but the potential returns are far higher than from savings accounts or regular stocks and shares.

Interestingly, IFS data has previously shown that the average weekly earnings of employees is over 30% higher than that of self-employed individuals; bad news for those who hoped for a simple formula of start your own business = higher wealth.

Who helps the wealthy manage their money?

About 75% of UK investors with over £1 million use professional wealth managers, according to market research by Altiant.

That includes private banks, portfolio managers, and independent financial advisers – though where the money goes depends on how rich you are.

Specialist wealth divisions at banks like Coutts, UBS, and Barclays cater to clients with seven-figure portfolios. They offer access to exclusive funds, estate planning services, and investment management.

Most clients with £5 million or above hand over full control via discretionary mandates – allowing the bank to make buy-and-sell decisions on their behalf.

Independent financial advisers (IFAs) handle a smaller slice of the pie – around 20% of high-net-worth wealth in the UK. They're more common among the merely affluent, often building portfolios with mutual funds, ETFs, and tax-planning tools.

At the very top end – households worth £20 million or more – many use family offices: private firms managing everything from investments to inheritance. Unlike private banks, which juggle dozens of rich clients, a family office works for one clan and does everything short of walking the dog.

London has around 1,000 family offices, overseeing more than £700 billion in assets.

Once ISA and pension limits are used up, this network of advisers and managers helps wealthy clients move into complex strategies to minimise tax.

How the rich really win

Managing money is only half the job. Keeping it out of the taxman's reach is the other – and that's where the real performance gains are made, and where the rich really thrive.

High-net-worth investors obsess over tax wrappers, reliefs, and legal structures designed to keep income, gains, and estates out of HMRC's reach.

Even the basics matter. That means maxing out ISA allowances each year and loading funds into pensions to get 40-45% tax relief on contributions.

Once those simple tools are used up, the wealthy can move on to government-backed schemes designed to fund risky early-stage companies. The Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs) both offer 30% income tax relief.

EIS also exempts any gains from capital gains tax if the shares are held for at least three years, and offers loss relief that can be offset against income or capital gains if the company fails.

A typical example: a banker puts £100,000 into an EIS fund, slices £30,000 off their tax bill, and gets to take a punt on some unlisted tech firms.

Around £2 billion flows into EIS-qualifying start-ups annually.

Then there's structuring. Many use Family Investment Companies (FICs) – limited companies set up to hold investments on behalf of the family. They pay corporation tax on profits – up to 25%, depending on size – which is still lower than personal income tax rates and lets parents pass value to children through shares, while keeping control through voting rights.

Selling a business also unlocks Business Asset Disposal Relief (formerly Entrepreneurs' Relief), which cuts capital gains tax from 20% to 14% on up to £1 million of lifetime gains.

It's a limited-use break, so sellers often plan carefully to make the most of it, slotting the sale into a year when their other gains are low, or pairing it with pension top-ups and other tax moves.

Offshore tactics haven't disappeared either.

Under the UK's "non-dom" rules, foreign residents can avoid tax on overseas income, as long as they don't bring it into the country. That's led to setups involving offshore trusts, Channel Islands accounts, and even borrowing against assets to avoid triggering tax.

By the time inheritance tax kicks in – 40% on anything over £325,000 – the plan's already in motion.

Some buy shares in small companies on the AIM exchange, which can become inheritance tax-free after two years. Others buy farmland, which qualifies for relief. Many just take out life insurance to cover the bill, so the children keep the house.

None of this happens by accident.

Wealthy clients work with tax advisers, lawyers, and private banks who specialise in "wealth structuring" – a dinner party-friendly way of saying they know how to bend the rules without breaking them.

Investment choices often have more to do with tax than with returns for the ultra-rich.

What the rest of us can take from this

If you're not super rich, most of what the wealthy do won't apply. You're not setting up trusts or channelling cash into offshore funds because the cost wouldn't be worth it.

As multimillionaire investor Rick Rule put it: never make a bet that could change what you eat for breakfast.

Still, the pattern's clear. The rich don't grow wealth in cash. They own things – shares, businesses, property – and they plan meticulously around tax.

Of course, the system favours those with more to start with. But even within that, there's room to shift how we think and make decisions around money.

You don't need millions to open a stocks & shares ISA or use your pension allowance properly. You just need to think like an owner instead of a saver.

In the end, the rich don't just save differently – they think differently. And that mindset? It's free.

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