Investment Clock insights

Old £1 coins could be the least of your worries

Nersen Pillay, Investment Director

6 October 2017

Some estimates suggest more than £1bn could be lost when the old £1 coin goes out of circulation on 15 October, meaning it's never been so important to check your old piggy banks and down the back of the sofa.  
While £1bn is a massive sum, a far greater loss has already been sustained by UK savers holding too much cash.  As highlighted in our latest Investment Clock Report, cash has lost 20% of its purchasing power since the financial crisis as UK rates have been held consistently below inflation.

With inflation around 2.9% but interest rates still near zero at 0.25%,  billions of pounds sitting in Cash ISAs or savings accounts are every day losing real purchasing power.

To illustrate the impact of inflation on  cash holdings, our calculations suggest £1,000 put into a standard deposit account in March 2009 would be worth about
£800 in today’s money while a simple multi asset fund would now be worth about £1,700 (after fees).

Past performance is not a guide to future performance. The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.