The overall size of the global middle class has been squeezed since the financial crisis year of 2008, a Credit Suisse report says, while noting that at the UHNW level, there has been growth in countries such as China but a worldwide fall in total.

The growth in size and total wealth of the world's middle-class population stalled after having ballooned before the financial crisis, and the number of ultra-wealthy people has also fallen in the past year, according to Credit Suisse's Global Wealth Report 2015.

“From 2008 onwards, wealth growth has not allowed middle-class numbers to keep pace with population growth in the developing world,” said Markus Stierli of the Credit Suisse Research Institute. “Furthermore, the distribution of wealth gains has shifted in favor of those at higher wealth levels. These two factors have combined to produce a decline in the share of middle-class wealth.”

Middle-class (and beyond) wealth has however grown strongly this century – across all regions and in almost all countries, the data, released today, shows. Globally, the wealth of those above the lower middle-class threshold more than doubled from $108.3 trillion in 2000 to $230.9 trillion this year. In Africa, it has grown by 140 per cent and in India by 280 per cent, while China has logged a six-fold increase.

“Further inspection of the data yields two important observations,” Credit Suisse said. “First, the increase in middle-class wealth occurred principally before the financial crisis. Second, the rise in wealth of the middle-class and beyond has gone largely to those with wealth above our upper middle-class threshold, despite the much smaller population size.”

As it stands, the net worth of the global middle-class (those with a total wealth of between $50,000 and $500,000) is $80.7 trillion, equal to 32 per cent of global wealth. Individuals with beyond the middle-class threshold represented a further $150 trillion, bringing total middle-class wealth and beyond to $231 trillion, or 92 per cent of global wealth.

To help put some of those figures in perspective, the report noted that a person needs just $3,210 (after debts) to fall in the wealthiest half of the world.

In other key findings, dollar appreciation caused global wealth to fall by $13 trillion from mid-2014 to mid-2015. Measured by constant (average) exchange rates, however, and global wealth has risen by this amount, Credit Suisse said.

Meanwhile, the US was again the global leader in terms of its increase in household wealth of $4.6 trillion, while China posted an annual rise of $1.5 trillion (also of note, China’s middle-class population is the largest in the world, with 109 million members). On the other hand, Europe experienced a loss of $10.7 trillion – more than double the $3.9 trillion loss in Asia-Pacific.

In percentage terms, Latin America posted the highest reduction in household wealth among regions (-17.1 per cent.) Also on a percentage basis, China is significantly ahead of North America (7.0 per cent versus 4.4 per cent), in part because gains in the US were offset by losses in Canada.

“Interestingly, the losses [in household wealth] recorded for the regions all vanish when currencies are valued at constant (average) exchange rates rather than the rates prevailing in mid-2014 and mid-2015,” Credit Suisse said. “The fact that the wealth declines observed last year depend so heavily on the prevailing exchange rate cautions against giving too much attention to the consequences of currency-related setbacks, which may well be reversed in the near future.”

Ultra high net worth
There are around 123,800 UHNWIs in the world (those with a net worth of at least $50 million) according to Credit Suisse's data, of which nearly half (61,300) are based in North America, 29,900 are in Europe and 27,600 are in Asia-Pacific.

Of the world's 123,800 UHNWI total, 44,900 are worth at least $100 million and 4,500 have assets above $500 million, the report said. While the strong dollar has reduced the number of UNHWIs overall by 800 since mid-2014, there has been a small uptick in the number of individuals with over $500 million, it added.

On a country basis, the US has the largest cohort of UHNWIs, at 58,855 (up 7 per cent since mid-2014), followed by: China (9,555 and up 23.9 per cent); the UK (5,378 and up 7.3 per cent); Germany (4,948 and down 17.5 per cent); Switzerland (3,836 and down 5 per cent); France (3,744 and down 14.3 per cent); Italy (2,831 and down 14.1 per cent); Japan (2,467 and down 24 per cent); Canada (2,432 and down 14.8 per cent); and Taiwan (2,184 and up 6.6 per cent).

Outlook
“We are clearly in a growth industry, with wealth set to continue its upward trajectory,” said Michael O’Sullivan, CIO of private banking and wealth management at Credit Suisse (UK and EEMEA).

Global wealth could grow at an annual rate of 6.6 per cent to reach $345 trillion in 2020, O'Sullivan said. The number of dollar millionaires could exceed 49.3 million in 2020 – a rise of more than 46.2 per cent – with China likely to see the largest percentage increase, followed by Africa.

“Overall, emerging markets account for 6.5 per cent of millionaires and will see their share rise to 7.4 per cent by the end of the decade,” O'Sullivan added. “High-income economies will still account for the bulk of new millionaires, with 14.0 million adults entering this category.”

He added that millionaire net wealth is likely to rise by 8.4 per cent annually and emerging markets will likely account for 9.1 per cent of millionaire wealth in 2020 - 1 per cent above current levels.

In other findings, the richest nations - with average wealth per adult over $100,000 - are found in North America, Western Europe and among the rich Asia-Pacific and Middle Eastern countries. This year there was more movement than usual among the country positions at the very top, Credit Suisse said.

The report's findings are based on an analysis of the wealth holdings of 4.8 billion adults across over 200 countries, from billionaires to the middle and bottom sections of the wealth pyramid.