Retirement incomes could be under threat following a massive sell-off in the global bond market.
In recent weeks, a reported $450 billion has been wiped off the global bond market, with another significant bout of activity experienced yesterday, triggered by weakness in the US Treasury market.
Returns on bonds move in the opposite direction to their price. And, after years of low yields, they're currently at an all-time high. This is because of concerns that Europe could slip into deflation, as well as a £793 billion bond-buying programme by the European Central Bank, which inflated demand.
As a result, investors have been rushing to sell, most notably in German bunds, or government bonds, where the sell-off was described yesterday by Goldman Sachs analysts as 'large and vicious'.
And, says Nigel Green, founder and chief executive of financial advisory organisation deVere Group, this could have a significant effect on retirement incomes in the UK.
"It is still unclear whether we're about to enter the end of the incredible three decade bond market rally – but what we do know is that the currently tumbling bond market is pushing company pension deficits even further into the red," he says.
"As such, the bond market sell-off is threatening the retirement incomes and ambitions of a large number of workers."
The situation could be particularly risky for those in so-called 'gold plated' final salary schemes, which are typically invested in bonds as they are seen as less risky than shares.
Already seeing record deficits, such schemes could now be hit even harder thanks to the sell-off.
"Many people with a company pension wrongly assume their retirement incomes are safe. Perhaps they were when they joined. But this isn't the case today due to the skyrocketing pension deficits which are now being exacerbated by a volatile bond market," says Green.
"I would urge people to have their company pensions checked sooner rather than later. This is because it is likely that their values could fall further as most trustees have already made almost every change possible, such as raising retirement age and amending the amount of pension increases, yet the schemes remain extremely vulnerable."
If the turbulence in bond markets continues, interest rates could also rise, potentially affecting mortgages - although savers could benefit. And share prices, too, could be affected, with higher bond yields making shares look less attractive.
Fine wine is one of the best-performing asset classes of the last 20 years, and prices are still going up as demand from China hits new highs - particularly at the top end of the red wine market.
However, there are no guarantees that this trend will continue, and the experts recommend that nobody goes anywhere near wine as an investment unless they can afford to lose a substantial proportion of their money - or if they would be happy drinking their losses.
They highlight that in 2008 and 2011, the market saw some serious slips - in fact in 2011 it fell 30% - so it’s important to be alive to the risks
We’re used to the idea of the value of cars falling over time, but desirable classic cars can actually gain in value. The most desirable handful of cars have seen their value double in the past four years, while even the kinds of classics that most people can afford are increasing in value by anything up to 20% a year.
However, as with all of these alternative investments, this isn’t guaranteed to continue in the future, so you should never invest what you cannot afford to lose.
Buyers also need to bear in mind that unless they are keeping the car in mint condition in a garage, they need to pay to keep it on the road - which can easily cost £1,000 a year - more if something big goes wrong.
Some owners think of this as the price they pay for the hobby of owning the car - quite aside from the investment - but if you consider the two together, it’s easy to see how even if the car itself increases in value, you’ll end up paying out more than you gain.
According to Knight Frank, antique furniture has had the worst run of all of the luxury investments. Prices fell 8% last year, and are down 22% in five years and 24% in ten.
This is partly because older antique furniture is falling out of fashion. As a result, more fashionable early and mid 20th century pieces have done better, and are up 29% in ten years.
Passing fashions make this a particularly volatile investment, so in this case more than any other, investors should buy things because they want to see them in their home - with the handy side-effect of a potential increase in value if they buy something iconic and unusual.
And while they should buy the best they can afford, they need to ensure they do not spend more than they can lose - or choose to keep in the lounge if the bottom falls out of the market.
Investing in rare coins is one of the most buoyant parts of the alternative market at the moment - with values up 10% in a year, 90% over five years, and 221% over ten years. However, this is definitely an area for experts, because unless you know what you are doing it’s easy to be taken in by counterfeits, doctored coins, and dealers who encourage you to spend more than the coin is worth.
Most people tend to start collecting coins as a hobby, investing to own something they love, hoping they will see some gains, but willing to take a loss on their collection if they ever had to sell. With this sort of approach, the big gains are likely to be well beyond your reach, as they are focused on the top end of the market. However, it should protect you from unaffordable losses if the value of your collection drops.