Picking today's royal investments

With the Diamond Jubilee upon us, Emma Dunkley and Julian Knight look at what has done well since the coronation, as a guide to current options

Sixty years is a very long time when it comes to savings and investment, but with life expectancy pushing 90 financial planning for the very long term is becoming a must. But what assets from your home, cash and pensions have done well in the past and which should you be looking towards to protect your future?


For many Britons a home is their main and sometimes only investment and looking at the track record you can see why. HSBC has worked out that the average UK house price is 86 times what it was in 1952, £162,722 compared with £1,891. The entire housing stock of the UK is worth just over £3tn, with mortgage debt, despite being historically high, only accounting for around a third of this.

And with a growing population, net immigration and far more households being formed than homes built, supply and demand suggests long-term price rises: "All the long-term indicators militate to prices going upwards and I can see home ownership itself becoming rarer and more expensive," says Chris Down from property investment specialist Heartstone.

But you shouldn't see your main residence as strictly an investment, Mr Down adds: "Where are you going to live? Downsizing doesn't always work for everyone. Instead, I see buy-to-let investors and those who put money into residential property funds as the main beneficiaries of the price uplift in the years to come."


Savings accounts

One hundred pounds in a cash savings account 60 years ago would now be worth £2,569.61. Patrick Connolly of advisers AWD Chase de Vere says those with savings accounts know that the value of their money cannot fall and by investing in a cash ISA, all interest will be tax free.

"However, there is a very limited potential for their money to grow. Interest rates are at historic lows and many people will pay income tax on their cash savings, which will put a big dent in their overall returns," says Mr Connolly. "Over the longer term, and especially over a period of 60 years, it is extremely unlikely that cash savings accounts will provide you with the best returns."



According to the Barclays Equity Gilt Study, £100 invested in 1952 would have now returned £8,340 after inflation. Anthony Doyle at M&G says the average annual real return of a gilt portfolio bought in 1962 and held until the end of 2011 has been 3.1 per cent, while the average annual real return on cash over that time period has been 1.6 per cent.

"There are a number of benefits to holding gilts," says Mr Doyle. "First, gilts are issued by the UK government, which is seen as a safe haven." But, he adds: "For gilts the biggest risk factor is the uncertainty of future inflation outcomes." In addition, yields at present are at historic lows.



If you invested £100 in gold in 1952, it would now be worth £6,482. Nicholas Brooks from ETF Securities says over the past 60 years, gold has been considered a safe haven against political issues and currencies falling in value.

Gold has tended to perform best during times of low interest rates and when currencies are debasing, just like now. But it's worth bearing in mind that the gold price can tank. It tends to work as a hedge against troubled times rather than a core investment to bet your financial future on.


Investment funds and shares

If you invested £100 in the Foreign & Colonial investment trust it would be worth £36,084 today, a higher return than property. "The best benefit of funds over the long term is the power of compound dividend income. It's the eighth wonder of the world," says Peter Fitzgerald at Aviva Investors. "Over the long term, the reinvestment of income can be responsible for two-thirds or three-quarters of returns."

Individual company shares can enjoy an even more beneficial combination of capital growth and dividend income.



In 1952, the basic state pension was £1 and 12 shillings a week. Now the state pension is £107.45 a week. Personal pensions invest in assets such as shares, gilts and property funds. In addition contributions are made from pre-tax income: "It makes sense to invest in a pension in order to take advantage of the tax breaks. For employees, they are also likely to benefit from employer contributions. It is very hard for any other investment to beat these substantial advantages you get from investing in a pension," says Tom McPhail, the head of pensions at Hargreaves Lansdown.

But pensions have also been hit with bad publicity over high fees and underperformance: "You have to commit to them. If you subsequently need your money in a hurry then you have a problem. Many people find them complicated and don't like annuities," he adds.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

general electionThis quiz matches undecided voters with the best party for them
Arts and Entertainment
Keira Knightley and Matthew Macfadyen starred in the big screen adaptation of Austen's novel in 2005
tvStar says studios are forcing actors to get buff for period roles
Prince William and his wife Catherine, Duchess of Cambridge show their newly-born daughter, their second child, to the media outside the Lindo Wing at St Mary's Hospital in central London, on 2 May 2015.
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Trainee Consultant - Surrey/ South West London

    £22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

    Ashdown Group: Trainee Consultant - Surrey / South West London

    £22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

    Recruitment Genius: Claims Administrator

    £16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

    Recruitment Genius: Senior SEO Executive

    £24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

    Day In a Page

    Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

    Fishing is on Nigel Farage's mind

    Ukip leader casts a line to the disaffected
    Who is bombing whom in the Middle East? It's amazing they don't all hit each other

    Who is bombing whom in the Middle East?

    Robert Fisk untangles the countries and factions
    China's influence on fashion: At the top of the game both creatively and commercially

    China's influence on fashion

    At the top of the game both creatively and commercially
    Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

    The man known as GOD has a reputation for getting the job done

    Lord O'Donnell's three principles of rule
    Rainbow shades: It's all bright on the night

    Rainbow shades

    It's all bright on the night
    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power
    Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

    The price to be paid for challenging the rule of extremists

    A revolution now 'consuming its own children'
    Welcome to the world of Megagames

    Welcome to the world of Megagames

    300 players take part in Watch the Skies! board game in London
    'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

    Charlotte Gainsbourg on 'Nymphomaniac'

    Starring in one of the most explicit films ever
    Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

    Robert Fisk in Abu Dhabi

    The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
    Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

    Vince Cable exclusive interview

    Charging fees for employment tribunals was 'a very bad move'
    Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

    Iwan Rheon is returning to his Welsh roots

    Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
    Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

    It's time for my close-up

    Meet the man who films great whites for a living
    Increasing numbers of homeless people in America keep their mobile phones on the streets

    Homeless people keep mobile phones

    A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before