Expand your grandchildren's waistlines or financial security?

In most countries, at this time of year, the shops are stacked with chocolate Easter eggs or cute bunny and chick toys, but what if you want to give your grandchildren something they can really remember you for?

golden egg infographic

Most children nowadays get a month's worth of chocolate in one hit, and it's gone in a flash. With the new pension changes coming into effect in the UK just in time for Easter, research suggests that many grandparents are thinking about taking some cash out of their pension, investing it elsewhere and helping children and grandchildren.

Anyone who had a private pension linked to the stock market in 2008 watched in horror as approximately £150billion was wiped off money-purchase pension schemes; those who were just about to retire were worst hit. It became clear that the most important financial decision you can make with regard to your pension portfolio, is to make sure it is balanced and invested broadly.

Fast forward a few decades and the young people of today are predicted to be in a far worse position when they are grandparents. The high cost of housing means many cannot even dream of owning their own home, and then of course there is the double edged sword of us generally living longer and the resulting costs.

You could just give your grandchildren some cash, but with interest rates still at record lows it is unlikely they will make enough interest on it to keep up with inflation. Gold, however, has been used as an inflation protector for centuries. It has the lowest correlation to the global business cycle, so that means if the stock exchange suddenly takes a dive, historically gold goes up. It is also an excellent preserver of purchasing power. It is not the kind of investment you would make to score a quick profit, it is there to provide a financial safety net in a volatile world.

We are of course talking about the physical metal itself and not exchange traded funds (ETFs), and it must be investment grade bullion, which is best kept in a secure, independent and audited storage facility. Of course past trends are not a guarantee of what will happen in the future, but it is important to realise that in 500-600 years BC, 350 loaves of bread cost one ounce of gold. You would still get roughly the same number of loaves today for your ounce; meanwhile national currencies have come and gone.

Over the past few years the world's biggest gold purchasers have been in China and the India – the two most populous nations, and rising industrial powers. Gold has been flowing out of western vaults into the East at a fast rate, this is a global asset, not a national one.

It is easier than you think to own gold. You can buy online at goldmoney.com and choose where around the world you would like your gold stored. All the vaults are outside of the banking system and run by global security experts.

So, whether you want to diversify your pension and put some of it into an asset known for its long term wealth protection (gold is included in the list of approved assets for a Self-Invested Personal Pension SIPP), or give your grandchildren that nest egg which will help protect their financial future, gold could be a good choice. After all, going back to school after the Easter holidays and being able to say, 'My grandparents bought me a real gold bar for Easter', is going to be a much better story to tell than, 'I got another chocolate egg'!


GoldMoney nor its representatives provide financial, legal, tax, investment, or other advice. Advice should be sought from an independent regulated person who is qualified to do so. Any information provided is solely as general market commentary and is not advice.

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