Pension Reform, Fine Wine and Taking Control

April 2015 brings us a new dawn in the way we look at pensions.

Under the new rules those over this age threshold will have total freedom to access their pensions when reaching retirement. It is now possible to take pension benefits from personal pensions without buying an annuity. 

This means that retirees will be able to withdraw capital from their personal pension and have greater control on how their hard-earned cash benefits them in the future. Now is the time to think hard about the future and be honest about what you want your pension pot to deliver and of course consult a financial adviser.

It is best to think about your goals. Short, medium and long term, and of course your commitments.

Investors are wise to diversify to minimise risk and enhance returns and a rounded portfolio will include traditional investments including equity-based products along with alternative assets and in particular tangible ones with a strong growth performance such as fine wine.

Remember that the Fine Wine market has a track record of providing average compound returns of more than 10% per annum in the medium to long term.

It also has many other benefits like the tax efficiency, which is particularly important for pension investors and generally resistant to the effects of inflation.

Fine wine is now considered by financial advisors as a means to diversify and strengthen investment portfolios.
A recent article published by Knight Frank (Wealth Report 2015) canvased the opinions of 500 wealth managers and the investment practices of their Ultra High Net Worth Clients. The report states that 6.1% of this total investment is in tangible assets including fine wine. They stated that “In our experience UNHWIs are becoming concerned about paper assets such as bonds and equities and are increasingly looking for tangible alternatives. The scarcity of luxury assets and their historic ability to hedge against inflation makes them an appealing investment proposition – it is always possible to commission a new yacht, but nobody can paint another Monet or build a classic Ferrari.” Saeed Patel,Investment Analyst Schroders


In the same respect, no-one can recreate a Lafite 1982 which at release was priced at 25.9 euros a bottle in 1983 en primeur, and at its peak reached £84,300 (1 x12-bottle case) at auction.

There is a finite amount of investment-grade wine globally and the opportunity to acquire wines from super vintages become even rarer over time. This scarcity increases again as wines reach their drinking windows.

For the new pension investor the timing could not be better to enter the fine wine market. The current price trend in Bordeaux offers superb opportunities for long term growth. The market is perfect positioned to adopt the old adage of buy at the bottom and plan to exit at the top.


For more information on the opportunities available right now contact our team on 0800 980 4509 and catch up with news and views in our free newsletter.


David Angel
David Angel

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