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London, Friday 30 January 2026: With the gold price at a record high and mounting concerns growing over stock market concentration and volatility, many savers are asking whether gold deserves a place in their pension. PensionBee offers three key considerations if you’re thinking about adding the yellow metal to your pension.
Maike Currie, VP Personal Finance at PensionBee comments: “Gold prices have surged to record levels, rising more than 60% last year and over 20% so far this year. The spectacular rally has been driven by geopolitical tensions, a weaker US dollar, inflation worries and rising government debt. At the same time, investors are increasingly questioning the reliability and diversification benefits of traditional safe havens such as government bonds.”
Three factors to consider if you’re thinking about adding gold to your pension:
1. How you hold gold matters
Gold mining shares have outperformed physical gold in recent months, but over longer periods have proved far more volatile. Operational risks, rising costs and poor acquisitions mean mining stocks can behave more like equities than defensive assets.
For most long-term savers, low-cost exchange-traded commodities (ETCs) backed by physical gold provide more direct, stable exposure and may be more suitable for diversification.
PensionBee’s 4Plus Plan, designed for customers aged 50 and over, aims to grow pension savings by 4% a year above the Bank of England base rate over a minimum five-year period. The plan’s holdings may be adjusted weekly to manage volatility, balancing portfolio growth and stability. Currently, this plan has an investment of 3.4% in the iShares Physical Gold ETC.
2. Keep gold in proportion
Gold works best as a supporting player, not the main act. For most investors, gold should make up around 5% of a diversified pension portfolio.
Over the past year, the PensionBee’s 4Plus Plan’s holding in the iShares Physical Gold ETC has moved between 3% and 6% of the overall plan, which is invested in a mixture of company shares, fixed income and cash. This disciplined ‘four-factor’ approach which balances growth assets, defensive assets such as gold, alternatives and cash-like holdings, helps manage risk through changing market conditions.
3. Gold doesn’t pay an income, but it can protect your pot
Unlike shares or bonds, gold produces no income. Its value comes purely from price movements. However, gold can help manage volatility as part of a diversified strategy. Given today’s backdrop of sticky inflation and rising correlations between equities and bonds, the traditional rules of diversification are shifting. Equity and bond markets are increasingly moving in tandem, and as a result, alternative assets are playing a growing role in many long-term investment strategies.
Gold’s low correlation with both asset classes means it can provide powerful diversification, helping to cushion pension savings during periods of market stress. Meanwhile, a number of big pension funds are reducing their exposure to US equities given mounting concerns over the market concentration in the big tech stocks and concerns over an AI-bubble.
Maike Currie comments: “Gold’s unique characteristics, including its scarcity, liquidity and long-standing role as a store of value, all make a strong case for its inclusion in pension portfolios as markets become more volatile and traditional protections weaken.
“Understanding how much gold fits into your pension has never been more important, particularly for time-poor savers nearing retirement and looking to access their pension. For many, choosing a ready-made option such as PensionBee’s 4Plus Plan - designed for those aged over-50 and more actively managed to protect and grow their pension assets - and leaving complex asset allocation decisions to the experts, can be a sensible approach.”
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