Investors Happy To Sacrifice Wealth For Health - UBS

Robbie Lawther

19 April 2018

A UBS survey of high net worth and ultra-HNW people around the world shows that the greater their wealth, the more money people will sacrifice to extend lifespans, with those holding $50 million saying they'd give up almost half of their per cent of their money to win an additional 10 years of healthy life.

The UBS Investor Watch report on health and wealth surveyed 5,000 high net worth investors in Germany, Hong Kong, Italy, Mexico, Singapore, Switzerland, Taiwan, the US, UK and UAE surrounding their views on how health affects their wealth. The priority of health over wealth is clear: Around 90 per cent say investing in their health is more important than acquiring more money. Some 92 per cent of survey respondents said their wealth enables them to live a healthier life.

UBS asked investors as to what percent of their wealth would you sacrifice to guarantee an extra 10 years of healthy life?

Less well-off investors said they would give up less money to guarantee additional lifespans. Investors with $10 million-$50 million said they would sacrifice 38 per cent of this money while investors with $2 million-$10 million would give up 36 per cent of it and investors with $1 million-$2 million would spend 32 per cent of their resources to keep healthy.

The study throws light on a long-standing insight that the marginal benefits of wealth decline as sums grow, and that people with the resources to do so will devote significant sums on health and "quality of life" over material possessions.

Medical costs
The report also found that 53 per cent of wealthy investors expect to live to 100. Healthcare costs top their list of concerns, with just over half worrying about rising medical expenses.

The concern of healthcare costs for investors varies significantly by country.

Worry about healthcare by country:
- 69 per cent in US
- 66 per cent in Singapore
- 56 per cent in Taiwan
- 54 per cent in Switzerland
- 52 per cent in Hong Kong
- 49 per cent in UAE
- 48 per cent in Mexico
- 47 per cent in Italy
- 47 per cent in UK
- 35 per cent in Germany.

Following healthcare, wealthy investors worry about having less wealth to pass on to successors because longer lifespans will eat into their assets.

And around 33 per cent worry they will need to work longer to afford the lifestyle they desire as costs continue to rise.

Healthy
“The idea of living to 100 would have seemed absurd up until recently,” said Nick Tucker, head of UK domestic at UBS Wealth Management. “Now, it’s destined to become commonplace. From a financial point of view, living to 100 throws up three main challenges. The first is the pure difficulty of planning a 30 or even 40-year retirement. The second is the change in investment mindset and approach. People are now likely to live through entire investment cycles in their retirement, while needing to access wealth at different times in that period.

Tucker added: “The final challenge is on the question of legacy and inheritance. By the time you pass away, your children are likely to be in their 40s, 50s or 60s. Wealth might not be as useful at this point as when they were younger. That’s a key reason why we’re seeing inheritance being shared earlier, or being given to grandchildren instead of children.”