Gold: Which? expert discusses investing in coins and bars
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As inflation continues to rise and record low interest rates prove cash savings to be an ineffective method, Glint’s research suggests that gold may be the next best option for savers. In the last 20 years house prices have increased by 175 percent with gold rising 556 percent in the same time period.
The research indicated that potential first-time homeowners could spend an extra four years saving for a deposit in cash rather than in gold.
Alternative currencies, investments and savings types are quickly gaining momentum and may soon overtake traditional methods of financial wellbeing.
One such method is gold, wherein Glint provides global gold-based savings and payments systems that allow clients to access, save and spend gold digitally.
They found that first-time buyer saves for roughly 12 years to afford a UK house deposit averaging at £59,000 when using traditional cash savings methods.
In comparison, calculated using historic gold prices, saving for the same deposit in gold would’ve been achieved in eight years, 33 percent sooner, than their cash savings counterparts.
Alongside this, gold has outperformed other ‘steadfast’ investments that many believed would never be surpassed.
One such index is the FTSE 100 which increased only by 28 percent during the same 20-year period where gold rose by 556 percent.
Jason Cozens, founder and CEO of Glint warned: “By continuing to persevere with cash
“Generation Rent finally has an alternative to the seemingly hopeless task of stockpiling a deposit from cash savings such as ISAs as house prices continue to soar to record highs, leaving them at risk of getting left further behind with every month that passes.
“Many first-time buyers feel like they’re swimming against the tide – once they’ve saved enough for their deposit, they find out that it’s no longer enough to secure the home they were saving for.
“Over the last 20 years, the growth in the value of gold has far outstripped the rise in house prices – saving in gold is a clear alternative for those searching for value and can unlock the possibility of home ownership.”
Continuing to speak about golds’ increased popularity he said: “More recently, the allure of cryptocurrencies captured hearts and minds of investors and savers but the extreme volatility of these assets ensures that these assets aren’t a viable option when saving for a home.”
There is also the additional downside to consider which is the fact that these ‘new’ currencies aren’t entirely accepted yet.
“There are also reports of reluctance amongst some lenders to approve mortgage applications to prospective buyers based on the deposit or income originating from crypto returns, with some applications rejected outright.
“Whilst the value of gold can decline, meaning that its purchasing power can in turn decline, it has proven its reliability as a long-term store of value and prices are steadily climbing back to the highs of last year.
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“Previously, access to gold was extremely limited but the digitalisation of gold with Glint has unlocked the asset to all consumers offering a viable means of saving for the future and even spending gold on an everyday basis.”
Statistics from the ONS and Halifax show that the average city home costs more than eight times the average salary, leaving ‘Generation Rent’ with the belief that owning a home will simply never be achievable.
In the last 20 years, UK house prices have risen by 175 percent, averaging at £96,500 in 2001 to £266,000 in 2021.
In the same time span, gold has risen three times as much, roughly 556 percent, going from £275 in 2001 to £1,803.
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