UK Pensions Exposed Without Diversification To Gold As Pensions ‘Time Bomb’ Looms

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The ‘pensions timebomb’ looms: UK pension funds lack of diversification, and over exposure to traditional assets may cost pension holders dearly according to new research from GoldCore. Pensions allocations to gold are very low in the UK and yet gold has an important role to play over the long term in preserving and growing pension wealth.

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“As we draw close and closer to the pensions ‘time bomb,’ diversification will become even more important and an allocation to gold in a pension portfolio will preserve and grow wealth in the coming years”, concluded Dr Lucey

New research shows the importance of owning gold in a pension in the UK. The research compiled by wealth manager and international bullion dealer GoldCore looks at the important role that gold can play as a diversification in UK pension portfolios.

Professor of Finance in Trinity College Dublin, Dr Brian Lucey concurs and warned about the lack of diversification in UK pension funds. “Pensions need balance. UK pension funds have been slow to embrace gold and this imbalance may cost pension holders dearly” said Dr Lucey.

“Small allocations to gold balance and stabilise pensions in the long term and gold should be an essential part of UK pension funds. The Guide To Gold In Pensions should be read by pension owners and pension managers,” said Dr Lucey who is a respected independent authority on gold.

British citizens are slowly waking up to the growing pensions crisis. The pension ‘time bomb’ looms closer and millions of people are at risk of having insufficient resources to fund their retirement years.

It is estimated that some 11 million people in the UK face entering "pension poverty." Average earners may need to save over six times more than they currently do if they're to generate an adequate retirement income, according to some calculations.

Head of Research in GoldCore, Mark O’Byrne said that “pension funds should include gold as part of a diversified portfolio. It has a very long track record, and possesses valuable investment attributes. Gold should form part of a diversified pension investment – it will protect from the pensions timebomb.”

“Conservative wealth management and asset diversification naturally grow in importance as people get older. Prudent asset diversification will enable pension funds to preserve and grow their pension savings,” according to O’Byrne.

The UK’s financial and economic outlook remains uncertain. “While the UK is recovering, the overall debt to GDP position remains worrisome and there is a real risk of a property bubble in London,” said O’Byrne.

There is also a risk that the state may find it difficult to pay for the massive entitlements of an aging population.

“Today’s uncertain world makes the investment and pensions landscape a more challenging place for pension owners and again underlines the importance of being properly diversified and not having all your eggs in certain assets,” according to O’Byrne.

Gold is once more being considered as an important asset to have in a properly diversified pension portfolios. Gold plays an important role in stabilising and reducing volatility in the overall portfolio and as financial insurance to protect against worst case scenarios.

These include the risk of inflation and stock and property crashes. Bail-ins or deposit confiscation, as was seen in EU country Cyprus, is a new unappreciated risk to pension owners and another reason to have an allocation to gold.

Currency devaluations as was seen on Black Wednesday in September 1992 when George Soros “broke the Bank of England” is another risk that gold hedges against.

The UK.’s influential research institute Chatham House , has said that gold can be used to hedge against currency devaluation and other risks as part of a diversified portfolio. “Gold can serve as a hedge against declining values of key fiat currencies, and can also be useful for central banks looking to diversify their foreign reserves,” Chatham House said.

“As we draw close and closer to the pensions ‘time bomb,’ diversification will become even more important and an allocation to gold in a pension portfolio will again preserve and grow wealth in the coming years,” concluded Dr Lucey.

For more information, please contact us at info(at)goldcore(dot)com and

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Mark O'Byrne
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Stephen Flood
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