Should you use crypto to boost your pension?

Cryptocurrencies, in particular Bitcoin, have delivered outsized returns for investors classes over the last decade-plus. Analysis of Morningstar data from VanEck showed that, between the start of 2014 and 30 June 2025, Bitcoin was the best-performing asset class in 9 of these 12 years and posted an average annualised return of 630% – with the second best-performing asset class, US equities, returning 15% on average over the same period.

Alongside the more conventional top stocks and funds, it is therefore little surprise that cryptocurrencies are becoming an increasingly popular choice among investors.

Data from Aviva shows that 21% of Brits – more than one in five – have bought cryptocurrencies and that more than a quarter consider crypto as part of their retirement planning.

“There are lots of different investment opportunities out there, and it’s easy to see why cryptocurrency has become so popular in recent years,” said Michele Golunska, managing director of wealth & advice at Aviva. “But we mustn’t forget the value of the good old pension.”

Among 25-34 year olds, 18% say they have reduced their pension contributions in order to buy cryptocurrency. Those doing so risk missing out on what Golunska calls “some powerful benefits” associated with pensions, including employer contributions (which often scale depending on how much employees contribute) and tax relief.

Why are people investing in crypto for their pension?

The potential for outsized returns were the greatest motivator for people to invest into crypto as part of their retirement planning. Of those Aviva surveyed who were considering diverting funds away from their pension and into crypto, 43% said they were motivated to do so because of the higher potential returns. Innovation and technology was a key driver for 36% of, while 32% said they wanted to invest in crypto in order to diversify their portfolio.

Persistent shifts in the pension goal posts from the government could be another reason why people are more inclined to invest in crypto than put the money into their pension, says James Yardley, head of investments at Chelsea Financial Services.

“The government keeps changing the rules [on pensions],” says Yardley. “I think that’s obviously partly contributing to the fact that people are turning away from their pension and looking to invest in other ways.”

Pensions will be subject to inheritance tax from April 2027 under changes that were announced in last year’s Autumn Budget. There are also rumours that Labour could reinstate the pension lifetime allowance, which was scrapped by the former Conservative government.

Meanwhile, crypto has obvious appeal for anyone who is distrustful of governments. The investment case for crypto in general rests on it being a hedge against the inflation that typifies fiat currencies over time, given its inherently limited supply. Many of the use cases for cryptocurrencies like Ethereum also revolve around secure payments that can’t be traced by banks and governments.

Boosting your pension with crypto: the pros and cons

Given the huge gains that crypto investors have realised over recent years it is understandable that many are tempted to use crypto to boost their pension, but it is important that anyone considering it understands the pros and cons.

“It’s hard to hold crypto inside the Sipp or ISA structure,” says Yardley. Crypto held outside of either of these could be subject to capital gains tax. You will also miss out on the tax relief that investing the equivalent amount into a pension would confer.

That could potentially change in October, when retail investors will be able to buy crypto ETNs that act as direct proxies for cryptocurrencies such as Bitcoin or Ethereum.

In the meantime, though, the only way to gain crypto exposure within one of these tax-efficient wrappers is to buy a blockchain ETF, which offer some imprecise exposure to crypto prices, or to buy a cryptocurrency proxy stock such as Strategy Inc (formerly MicroStrategy) (NASDAQ:MSTR).

Another consideration that Yardley highlights is the correlation between crypto prices and tech stocks. In theory, crypto ought to offer diversification to a portfolio of shares, but recently crypto prices have moved in tandem with big tech stocks, which in turn tend to lead broader equities markets.

Cryptocurrency and retirement planning

Ultimately, like any investment, it is up to individuals to decide the wisdom of incorporating crypto into their retirement plans.

“It’s important to weigh up the risks and rewards carefully and make sure your retirement savings are working as hard as they can for you,” says Golunska.

Yardley suggests that, given its volatility, it wouldn’t be advisable for anyone to put 100% of their long term savings into crypto. But its potential for rapid returns and its resistance to inflation mean that “there is a case for putting 5-10% in”.

If crypto is playing a role in your retirement planning, be aware that it can be difficult to pass it on. Inheriting crypto assets is complex because they are not automatically accessible or traceable – discretion and privacy are hard-wired into their design.

Aviva encourages consumers to take a balanced approach to retirement planning and urges people to prioritise long-term financial security over short-term speculation.