A CoreData Research study of 500 UK retail investors conducted in March and April found 40 per cent of Millennial respondents would add cryptocurrencies to their pension given the opportunity to do so.
But digital currencies such as bitcoin hold far less appeal for older generations including Gen X (10 per cent), Baby Boomers (7 per cent) and the Silent Generation (10 per cent).
When presented with a list of alternative assets to hypothetically add to their pension, the most popular option for respondents overall is gold or silver (45 per cent), followed by buy-to-let residential property (33 per cent). About a quarter of respondents overall would invest their pension in frontier markets (24 per cent) and rare earth metals (23 per cent), while about one in five opt for farmland or timber (19 per cent) and medicinal cannabis (18 per cent). This is followed by vegan products (17 per cent) and cryptocurrencies (15 per cent).
Demand for gold or silver is strongest among the Silent Generation (50 per cent) and Baby Boomers (49 per cent), while Millennials have a greater appetite for medicinal cannabis (22 per cent) and frontier markets (28 per cent).
Surprisingly, the study also found that advised investors are more likely than their non-advised counterparts to choose cryptocurrencies (20 per cent advised vs 8 per cent non-advised). And a higher percentage of advised investors would add medicinal cannabis to their pensions (22 per cent advised vs 13 per cent non-advised).
High net worth individuals with over GBP1 million in assets are also more likely to pick cryptocurrencies (22 per cent vs 15 per cent overall), medicinal cannabis (25 per cent vs 18 per cent overall) and frontier markets (29 per cent vs 24 per cent overall).
But the report also shows respondents have concerns about investing their pension in new areas such as cryptocurrencies or cannabis stocks. Almost half say their biggest concern is investing in a sector that could be unregulated or open to fraud (43 per cent), while more than a third worry that the risks involved are not yet understood (38 per cent). Lack of performance track record is the major worry for a quarter of investors (25 per cent), while a fifth raise concerns over new ideas getting hyped up by the press and social media (20 per cent).
“These findings show pension investors have an appetite for more alternative and exotic investments but also recognise the potential risks,” says Andrew Inwood, founder and principal of CoreData. “Pension holders can gain indirect exposure to some of these areas through a growing number of funds and ETFs. But cryptocurrencies are off the menu for now – these are largely unregulated and volatile assets and the FCA has already sounded an alarm bell over the risks they pose to retail investors.”