Billionaires made more money in 2017 than in any year in recorded history. The richest people on Earth increased their wealth by a fifth to $8.9tn (£6.9tn), according to a report by Swiss bank UBS.
The fortunes of today’s super-wealthy have risen at a far greater rate than at the turn of the 20th century, when families such as the Rothschilds, Rockefellers and Vanderbilts controlled vast wealth. The report by UBS and accountants PwC said there was so much money in the hands of the ultra-rich that a new wave of rich and powerful multi-generational families was being created.
The world’s 2,158 billionaires grew their combined wealth by $1.4tn last year, more than the GDP of Spain or Australia, as booming stock markets helped the already very wealthy to achieve the “greatest absolute growth ever”.
More than 40 of the 179 new billionaires created last year inherited their wealth, and given the number of billionaires over 70 the report’s authors expect a further $3.4tn to be handed down over the next 20 years.
“A major wealth transition has begun,” the report said. “Over the past five years, the sum passed by deceased billionaires to beneficiaries has grown by an average of 17% each year, to reach $117bn in 2017. In that year alone, 44 heirs inherited more than a billion dollars each.
“The calculation is simple. There are 701 billionaires over the age of 70, whose wealth will transition to heirs and philanthropy over the next 20 years, given the statistical probability of average life expectancy.” The 30 richest septuagenarians or older have a combined net worth of more than $1tn.
David Rockefeller, the last surviving grandchild of the Standard Oil founder John D Rockefeller, who became the world’s first billionaire in 1916, died at the age of 101 last year with a $3.3bn fortune. An auction of of the art and antiquities he and his wife collected – including pieces by Monet, Matisse and Picasso – raised more than $832m for charities they supported
Not all of the vast wealth held by elderly billionaires may be transferred to their children, however, because many of the world’s richest people have signed up to Giving Pledge to give at least half of their wealth to charity.
More than 180 people have signed up to the scheme, since it was launched by Bill Gates, 62, the world’s second richest person with a $95bn fortune, and Warren Buffett, 88, the third richest with $84bn.
The world’s richest person, Jeff Bezos, who has an estimated net worth of $146bn, more than any one person in history, has not signed up to the pledge. He created the Bezos Day One Fund last month, a $2bn scheme to help address homelessness and improve education for children in low-income families.
The richest person in the UK is Sir Jim Ratcliffe, the founder and chief executive of the petrochemicals company Ineos and a high-profile Brexiter, who has an estimated fortune of £21bn. Ratcliffe is preparing to leave Britain for tax-free Monaco, just months after he was knighted for services to business and investment.
Ratcliffe has not signed up to the Giving Pledge. His biggest public contribution has been a £25m donation to the London Business School, which renamed its main John Nash-designed building the Ratcliffe.
Most of the world’s billionaires are in the US, but the number of ultra-wealthy people is growing fast in China, where two new billionaires are minted every week. “Twelve years ago, the world’s most populous country was home to only 16 billionaires,” the report said. “Today, as the ‘Chinese Century’ progresses, they number 373, nearly one in five of the global total.”
One Chinese billionaire told the researchers: “Nowhere else in the world can you find better conditions for growth than in China. The continued progress of wealth creation is supported by government policies liberating the economy, while urbanisation and business model disruption has crafted powerful new entrepreneurs.”