Could Cryptocurrency add ‘significant value’ to retirement pot? Britons issued warning

Pension: Expert gives advice on preparing for retirement

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Investing in cryptocurrency could offer a helpful alternative to traditional pension saving and allow people to take control of their retirement plans. However, the strategy does not come without risk.

Mark Basa, global brand and business manager at HOKK Finance, spoke exclusively to Express.co.uk and explained some of the potential benefits cryptocurrency could have when it comes to retirement saving.

He said: “Pension funds are typically centralised, offering very little return on investment.

“When you eventually retire, much of your money has gone to enormous corporate overheads and fees, giving you far less if your fund was decentralised.”

Mr Basa added that by investing in crypto, someone would have “the ultimate decision over when you want to retire”.

He continued: “Using crypto means your money is under your control.

“This means that if you want to move some of your money over to another token that is offering higher yield for staking, then you can do so at your wish.

“If this were to be globally implemented, people would certainly retire in their 50s.”

However, Katharine Wooller, managing director at Dacxi, warned of the risks which could accompany crypto investment as a means of funding retirement.

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She said: “Without doubt fortunes have been made (and lost) in cryptocurrency exactly because it is one of the most volatile markets in the world.

“But the big winners were not traders. Most were those early adopters who bought Bitcoin and Ethereum at next to nothing prices, held on to it, and sat quietly watching the values soar.

“Trading is not for the faint hearted and, unless you consider doing it as your day job, or have the sophisticated programming skills to create the algorithms that trade automatically at lightning speed 24/7/365, we would not recommend it as a retirement strategy.

“However, a buy-and-hold investment strategy that embraces cryptocurrency, or including an allocation of crypto in a pension, could add significant value to a retirement pot.”

It appears that younger generations are becoming more interested in cryptocurrency, with more than a third (34 percent) of Gen Z saying they would rather invest in cryptocurrencies than a pension, according to a survey from W1TTY.

Almost a fifth (18 percent) said they want their bank to provide support and advice on investing in digital currencies.

Ammar Kutait, CEO and founder of UK-based fintech W1TTY, urged younger people not to delay saving towards their pension.

He said: “Retirement probably feels like lightyears away for 18-24-year-olds, but you’re never too young to plan for your future.

“While crypto may seem like an attractive asset class, it’s also an incredibly volatile one, so anyone choosing to invest in it should understand the risks involved.

“Impressive gains can be met with sudden, sharp declines.”

He concluded: “Overall, it’s important for young people to diversify their portfolios.

“Spreading their finances across traditional investment vehicles and alternative assets is just one strategy they should be considering as they lay down the foundations for their financial future.”

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