Over recent months individuals looking to retire have been badly bruised by two factors. Firstly, one of the consequences of the economic downturn has been the continual decline of the stock market and other investment values. This coupled by the lowest interest rates in UK history has certainly meant that most pension pots would have devalued. Secondly, due to the above factors, pensions annuities have decreased in value and therefore are not giving pensioners as good a monthly income as they did a while go.

Since the traditional means of funding ones retirement is currently not delivering to expectation, there has been a marked increase in the number of people looking at ‘alternative investments’ to fund their lifestyle post-employment.

According to Aon Consulting Firm around 70% of people are looking to invest in alternative investments to build up their pension pots. Top of the list of alternative investments were art and antiques as well as wine and whiskey.

The Royal Institution of Chartered Surveyors have also seen a similar trend as they report a significant increase in the number of individuals seeking alternative investments due to dwindling property prices. They suggest that there has been a dramatic turnaround in the arts and antiques market, specifically items currently priced under £5,000. They report that only certain categories within the arts and antiques world have seen a significant uptake, for example, the oil and water colours market has seen a net balance of 10% more surveyors reporting a rise than a fall. Jewellery and silver are another category that has remained resilient during this period. However, items such as clocks and contemporary art have not seen a significant increase in uptake over the last year.

Institutional investors are also looking at ways to maximise returns, many of whom have turned to alternative investments. According to FIN Alternatives around 52% of public pension plans ‘planned or already invest’ in alternative pension investments. However, institutions tended to invest more into real estate, private equity, venture capital and hedge funds. Typically, these type of investments are reserved for institutions or the super-rich due to the amount needed to participate in these vehicles.