Budget: how to try to beat austerity with these investment options

There’s a reason whisky is known as liquid gold

With the Spring Budget being criticised by some as concealing a new round of austerity, tangible assets like single malt whisky can offer an effective hedge against inflation.

The UK may be set to narrowly avoid a recession this year with real hope that inflation will finally fall, but putting funds into stocks and shares or traditional savings accounts doesn’t offer the returns it once did.

Although ISAs and Premium Bonds are free from capital gains tax, they offer scant gains right now – the best rate for an easy-to-access ISA is currently around 3% but, considering the rate of inflation was nearly 11% in November, your money is actually devaluing each year.

And the news this month that Silicon Valley Bank UK was snapped up by HSBC for just £1 only serves to highlight the volatility of the market.

With traditional investment options not working as hard as they once did, investors are turning to tangible assets to depend upon in increasing numbers. Many have been choosing to buy up cars, watches, art, antiques or jewellery… and now it’s whisky which is earning a reputation as ‘liquid gold’.

There have been many high-profile whisky sales in the past year, topped by the record-breaking £16 million paid in a private sale for a cask of 1975 single malt from the Ardbeg distillery on Islay.

In fact, the whole industry is booming: Scotch whisky exports broke records in 2022, growing to more than £6 billion for the first time. The Asia-Pacific region overtook the EU as the industry’s largest regional market, with double-digit growth in Taiwan, Singapore, India and China.

The best thing? Whisky gets older and rarer the longer you leave it

This is coupled with the fact that a forthcoming free trade deal with India lifting the 150% import tax there on Scotch whisky could actually double the size of the Scotch whisky market in five years.

Why invest in cask whisky?

The desirability and quality of Scotch whisky increases with age, as the majority is bottled before it hits 12 years old. Common sense tells us that the longer you hold on to your whisky cask, the more coveted it will become, which is why it’s increasingly being seen as a safer, more stable option for your investments.

There are currently only 141 operating whisky distilleries across Scotland and, to be called Scotch whisky, the spirit must mature in oak casks in Scotland for at least three years.

According to Sam Brooks, founder of Vintage Acquisitions (the trading name of Brooks & Whitaker Limited), casks can double in value every five to 10 years. While this may vary, this is what the company has witnessed over the past 12 years of trading.

Vintage Acquisitions are stockists, meaning they hold anything up to £2m worth of stock at any time, ready to be traded. Since it was founded in 2011, Sam and his team have built relationships with the very best distilleries north of the border – and helped hundreds of people to exit the market too.

They can help you choose the right cask for your budget and needs and arrange all the paperwork, including the certificate of title for your casks. Then you can either arrange your own storage at an HMRC-approved excise warehouse or let Vintage Acquisitions handle all storage and insurance in-house, with your cask stored in one of the company’s 24 HMRC-approved excise warehouse accounts.

“We are confident that we have the expertise to give prospective buyers enough reassurance to talk through and fully understand their requirements and make an informed decision based on fact, not fiction,” says Sam.

“We wholeheartedly want our transparent and thorough processes to provide prospective clients with the best possible experience and outcome based on their circumstances, timescales and objectives. Like our whisky, we are in it for the long term.”

No capital gains tax to pay

As the threshold at which you have to pay capital gains tax becomes even lower in April, cask whisky investment is an even more attractive option.

Because whisky is classed as a 'wasting asset', meaning it has a predictable life of 50 years or less, there is no capital gains tax to be paid when it is sold – and that means more profit for you.

Are there any guarantees?

Vintage Acquisitions work on the simple principle that if you buy whisky casks and are prepared to hold on to them, the whisky you purchased will be older, in shorter supply and therefore more desirable than when you first made the purchase. Historically, purchasing then holding on to whisky casks over the medium- to long-term has been lucrative – but it is worth bearing in mind that past performance is no guide to the future.

How can I find out more?

For a comprehensive Whisky Cask Investment Guide that can answer all your questions about the purchase process, head to the Vintage Acquisitions website www.vintageacquisitions.com.

This is paid-for content on behalf of Vintage Acquisitions, and does not necessarily reflect the views or advice of the Northamptonshire Telegraph. As with all financial investments, your investment may go down as well as up, and people are recommended to take financial advice.