Equity investors quids in since one pound coin first minted in 1983 – London Business News | London Wallet

One pound coin has lost more than two thirds of its value since 1983, new research has found.

Buying power is now just 30p as a result of inflation and by contrast, £1 invested in an average tech fund 40 years ago would now be worth nearly £20.

Laith Khalaf, head of investment analysis at AJ Bell, comments: “Since the £1 coin was first introduced 40 years ago in 1983, it has lost more than two thirds of its value as a result of inflation. That newly minted coin in 1983 would now have the buying power of just 30p if it was kept in a piggy bank, or down the back of a sofa. However, the reality is that most money isn’t kept in coinage in this way. What isn’t spent is normally saved or invested, and some investments would have seriously beaten inflation over the last 40 years.

“Even £1 stored in an instant access account would have beaten inflation over this period and would now be worth £1.14 in real terms. A £1 investment in UK government bonds would now be worth £2.14, after accounting for inflation, and £1 invested in bricks and mortar would be worth £3.63.

“But the really inflation-busting returns have come from the stock market. A £1 investment in a UK stock market fund would now be worth £10.02, even after accounting for inflation. An investment in the typical UK equity income fund would be worth even more, at £12.99, reflecting the long-term compounding power of rolling up dividends.

“More specialist investments have done even better. £1 invested in a UK smaller companies fund 40 years ago would be worth £15.01 today. But sitting at the top of the tree is, unsurprisingly, the technology sector. £1 invested in the average technology fund 40 years ago would be worth almost £20 today, even after accounting for the effects of inflation.”