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iStock 1096860416
iStock 1096860416

Triple lock won’t save the ‘Golden Years’


 

Brits must look for alternative assets as retirement wealth comes under threat

Financial security is the bedrock of a happy retirement – referred to as the ‘Golden Years’ – but the changing economic landscape is currently threatening people’s retirement wealth. 

Although the government recently increased the state pension by 3.1%, it is actually a fall in real terms and will not provide pensioners with what they need. Following this increase, the full basic state pension is £185.15 per week which is a fraction of the Living Wage at £380 per week*. With the UK already on the cusp of a pension poverty crisis, and energy prices rising by an average of 54%, a state pension simply isn’t enough to make retirement as golden as it should be. 

Most of the UK now rely on a private pension to set them up for the golden years, but these come with their own challenges, and the outlook is extremely uncertain. Not only are they not protected by the triple lock, but pension funds are struggling to counterbalance key inflation levels. Between 2020 and 2022, UK pension funds grew an average of 7.2%, barely beating UK inflation which currently sits at 7%.** Pension funds have had a poor start to 2022 as the war in Ukraine has sent shares and bonds plummeting. This means that private pensions are no longer the safe option they once were to bolster state contributions.  

Many are looking for alternatives, with almost 60% of investors wanting digital assets in their retirement plans.*** While this is a step in the right direction, the same survey highlighted that some digital assets, particularly cryptocurrencies, are too volatile to play a long-term role in people’s pension plans.

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Kinesis is highlighting that there is a safer, more stable alternative – gold. New technologies are enabling gold to be part of retirement plans, meaning that retirees can not only benefit from a historically stable asset which has been proven to maintain its value over time, but Kinesis’ industry-first fee-sharing yield on gold means they can also see their wealth grow in real terms. 

Jai Bifulco, Chief Commercial Officer of Kinesis Money, says: “People’s hard-earned wealth is currently under threat, but retirement savings especially. Many are currently sticking to the status quo and do not realise the impact this could have on their wealth in later life. 

“It’s great to see some people seeking alternatives, like digital assets. But cryptocurrencies are not conventionally known to be a source of stability and may not provide the steady interest needed to build a retirement nest egg.

“There are, however, other paths people can take to protect their wealth in preparation for later life. As a starting point, individuals can limit the amount of money they store as cash savings, and begin to explore assets that are recognised for their price stability. Gold offers a proven capacity to store value over time and is now more accessible than it has ever been, through its digitalisation. Gold has shown resilience during notable economic crashes, more so than stocks and bonds, and brings with it a track record for value appreciation, seen over the past 50 years. Better yet, you can now also earn a yield on gold, providing a steady and stable return for those sacred golden years.”

 

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