As the world embraces digital assets, incorporating cryptocurrency into a Small Self-Administered Scheme (SSAS) pension is becoming increasingly attractive. The Wealth99 platform has been built to be compatible with SSAS pension funding. While traditional investments remain important, the inclusion of cryptocurrencies in a SSAS pension portfolio can provide several unique benefits that may enhance long-term retirement planning. We’ve highlighted below some of the possible advantages of incorporating cryptocurrencies into a SSAS pension.
Diversification and Potential for Higher Returns:
One of the primary advantages of incorporating cryptocurrencies into a SSAS pension is diversification. Cryptocurrencies operate independently of traditional financial markets and, therefore, offer an alternative asset class. By adding cryptocurrencies to a pension portfolio, investors can diversify their holdings beyond stocks, bonds, property etc which could reduce risk and possibly increase the potential for higher returns.
Hedge Against Inflation and Currency Risk:
Cryptocurrencies, particularly those which have genuine use cases behind them (like Bitcoin), are often seen as a hedge against inflation. As this type of cryptocurrency has a limited supply and is not subject to the same inflationary pressures as fiat currencies, they offer the potential to preserve purchasing power over the long term. Including cryptocurrencies in a SSAS pension could help safeguard retirement savings from the erosive effects of inflation and mitigate currency risk.
The funds within a SSAS pension can grow in a tax-efficient manner. Income generated from investments held within the SSAS, such as dividends and interest, is generally exempt from income tax. Capital gains realised on the sale of investments held within the SSAS are also usually tax-free. It is important to check the comprehensive tax implications of a SSAS pension with your SSAS provider and Financial Advisor.
Global Access and Liquidity:
Cryptocurrencies operate on a global scale, allowing investors to access markets and opportunities beyond their geographical boundaries. By incorporating cryptocurrencies into a SSAS pension, individuals gain exposure to the global cryptocurrency market, providing potential for enhanced returns and liquidity. Cryptocurrencies can be bought, sold, and traded easily, enabling pension holders to capitalise on market opportunities quickly and efficiently.
Innovative Technological Advancements:
Cryptocurrencies are built on innovative blockchain technology, which has the potential to revolutionise various industries. By including cryptocurrencies in a SSAS pension, investors align themselves with cutting-edge technological advancements and participate in the growth of the blockchain ecosystem. This exposure may offer additional long-term growth potential as the adoption and development of blockchain technology continue to expand across sectors.
Increased Financial Control and Autonomy:
SSAS pensions provide a unique opportunity for individuals to have greater control over their retirement savings. By incorporating cryptocurrencies into a SSAS pension, investors can exercise even more autonomy by actively managing their digital assets. They can take advantage of trading opportunities, make investment decisions based on their risk appetite and market analysis, and potentially enhance overall pension performance.
Potential for Early Adoption Benefits:
Incorporating cryptocurrencies into a SSAS pension allows investors to potentially benefit from being early adopters of a rapidly evolving asset class. Cryptocurrencies have shown significant growth in recent years, and while they may experience volatility in the short term, they also offer the possibility of substantial returns. By getting involved early, investors have the chance to capture potential gains before cryptocurrencies become more mainstream.
Incorporating cryptocurrencies into a SSAS pension offers numerous advantages, including diversification, potential for higher returns, hedging against inflation, and exposure to innovative technologies. While it's important to note that cryptocurrencies carry risks and market volatility, they can provide an additional avenue for long-term growth and financial autonomy. Individuals considering adding cryptocurrencies to their SSAS pension should seek advice from financial professionals who can provide insights tailored to their specific circumstances, risk tolerance, and investment goals.
We can introduce you to our expert SSAS pension partners who can talk to you more about your individual circumstances. We can also tell you more about how you can utilise the Wealth99 platform to incorporate digital assets into your SSAS pension. Click here to book a free 1:1 video call with our team.
The information provided in this document does not constitute investment advice, financial advice, trading advice or any other sort of advice and you should not treat any of this document’s content as such. You should carefully consider whether trading or holding cryptocurrencies is suitable for you relative to your financial position. The price of cryptocurrency can go down as well as up and past performance is not a guide to future performance. Investors may not get back the full amount originally invested.
The information in this document is believed to be reliable. Wealth99 has taken reasonable care to ensure the information stated is accurate. However, Wealth99 makes no representation, guarantee or warranty that it is wholly accurate and complete. Do conduct your own due diligence and consult your financial adviser before making any investment decision.