Here’s an unsurprising fact. As stock markets enter the third year of a bull market, many newspapers headline the fact that the number of millionaires in Britain is rising.
 
“Slump? Every day Britain gets 120 new millionaires” said the Sunday Times, a story followed yesterday by lots of dailies: the Daily Express, The Daily Telegraph, the Yorkshire Post, the Daily Star, and others. “120 millionaires a day created as Britain recovers” said the Express.        
             
                           
                             Daily Express, 21 March 2011
 
Recreated might have been a better way of putting it. The source of the story was Barclays Wealth, which based its report on Ledbury Research methodology. The model Ledbury uses is based on the country’s total adult population, total wealth, and wealth distribution. I’ve no idea whether it produces reliable figures, but that’s not the point.
 
Whether it’s reliable or not, it estimated a total of 619,000 millionaires in the UK in 2010, up from 528,000 at the end of 2008 – hence the “120 a day” claim. This represents a 17 per cent increase. But the report also reveals that up to the end of 2008 (period unspecified) the number of millionaires had fallen by 15 per cent.
 
If a 15 per cent fall produced a figure of 528,000, then the starting point must have been 621,176 or thereabouts (528,000 divided by 0.85). Let’s round that to 621,000.
 
Whoops! That means there were 2,000 fewer millionaires at the end of 2010 than before the recession began. Barclays Wealth does not actually include the 621,000  figure in its report, but it’s not difficult to work out.
 
The “rise” in people with wealth exceeding £1 million pounds depends entirely on when you start counting. By choosing to start at the end of 2008 (see chart below) Barclays Wealth picked a period in which wealth – for those who already possessed it – has indeed increased. That’s not at all surprising, since the stock market has risen by 63 per cent since it bottomed out in March 2009. 
 
     
Choosing when to start counting is the oldest trick in the book for investment managers, although if they are selling products to consumers they have rules to follow. They usually quote rises (or falls) in their funds over periods such as one year, five years, or since launch. But if you are selling stories to the media, no such rules apply.  
 
To be fair to Barclays Wealth, they do spell out that the recent rise is the wealthy starting to recover from the downturn. And they predict, for what it’s worth, that by 2020, the number of millionaires will have risen by between 27 per cent (Wales) and 46 per cent (the North East). That’s if another recession doesn’t intervene.