Pensioners abandoned – safe havens cash, bonds and gold flop while Bitcoin SOARS

Cash used to be king, especially in retirement, because most pensioners rightly don’t want to take risks with their money. That was fine when savings accounts paid five or six percent a year, but those days are long gone.

New figures show the savings products older people rely on to supply a safe and steady income in retirement have been the worst performers over the last decade – by a long shot.

Years of near-zero interest rates and virtual money printing have boosted riskier assets like shares and property, but destroyed cash and bonds.

Someone who placed £1,000 in the average cash Isa a decade ago would have seen their money grow to a mere £1,142 today.

That is the worst return from 27 different investments ranked in the new AJ Bell Investor Strategy League.

Precious metal gold, another safe haven favoured by the retired, did almost as badly. It would have turned £1,000 into a meagre £1,280, and ranks in 26th place.

Yet another low-risk investment favoured by older people, government bonds, slumped to 24th place, with the UK gilt sector turning £1,000 into just £1,380 over the decade.

By contrast, gamblers have generated outsize returns. Crypto-currency Bitcoin was the decade’s best performing asset class, turning £1,000 into an incredible £11.1 million.

Fast-growing US technology stocks such as Apple and Amazon have also rewarded those willing and able to embrace higher levels of risk – typically younger, wealthier investors.

The tech sector was second best performer, as measured by the fortunes of L&G Global Technology Index, which turned £1,000 into £8,140.

Investing in global companies was also rewarding, with the MSCI World Growth Index in third place turning £1,000 into £4,917.

While the stock market and cryptocurrencies have made the rich even richer, pensioners are struggling to get by.

READ MORE: Bitcoin and Tesla soar but cash and gold flop – which assets will m…

The Bank of England should hang its head in shame because it’s largely to blame.

After the financial crisis, the authorities rushed to bail out the banks, even though they were the architects of their own misfortune.

Savers were abandoned as the BoE slashed base rates to 0.25 percent in March 2009 and printed hundreds of billions of virtual money through its Quantitative Easing (QE) programme.

They said it was only a temporary measure but as AJ Bell’s figures show, the damage has lasted for 12 years and counting.

Propping up the big banks came of the cost of savers, who got next to nothing on their deposits, while bond yields fell too.

The big banks do not need to offer decent savings rates to attract deposits, because they are getting financial support from the government.

All that freshly printed QE has flown into risky assets such as Bitcoin and tech stocks, making the rich even richer.

DON’T MISS:
Fury at ‘callous’ plans to axe free NHS prescriptions – ‘disgraceful’ [REVEAL]
Average pensioner income is £19,240 a year – so how much do you nee… [ANALYSIS]
Council tax to hit £2,000 from April – pensioners can cut bill to zero [INSIGHT]

This pattern may finally be going into reverse. As inflation rises, interest rates will follow. There are signs this will finally hit investor appetite for higher risk assets.

Bitcoin has slumped from almost $70,000 in November to around $40,000 today and tech stocks look vulnerable, too.

Higher interest rates could improve the returns from both cash and bonds, offering some respite to pensioners. The BoE hiked rates in December – but only from 0.1 percent to 0.25 percent.

Savings rates will be nowhere near forecast inflation, which could soon top six percent.

Today, the best you can get on easy access is 0.70 percent. Savers continue to face years of rotten returns, and nobody is fighting their corner.

Least of all the Bank of England.

Stay connected with us on social media platform for instant update click here to join our  Twitter, & Facebook

We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.

For all the latest Business News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! TechAzi is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More