New research published to mark the 40th anniversary of the £1 coin in 1983 shows how hard people’s pounds have worked in different savings and investments since then.

The worst thing anybody could have done with a newly-minted £1 coin was stick it in a piggybank.

Their pound would have the spending power of just 30p today as inflation wiped out more than two thirds of its value, said Laith Khalaf, head of investment analysis at AJ Bell.

Its value would have beaten inflation in an instant access savings account over 40 years, but only just.

It would have grown to £3.75 today, which is the equivalent spending power of just £1.14 in real terms, after accounting for inflation.

Similarly, a £1 investment in UK government bonds, known as gilts, would nominally be worth £7.03, but its spending power would be just £2.14 in 1983 terms.

Brits love bricks and mortar and £1 invested in UK residential property would have grown to £11.90. Adjusted for inflation that's just £3.63.

Stock market investors would have smashed these returns, especially if they had invested in the best performing sector of all.

A global equity fund investing in a spread of international stocks would have turned £1 into £28.90 today (£8.81 adjusted for inflation).

A fund investing in UK growth stocks would have increased it £32.85 (£10.02 in real terms), while a UK smaller companies fund will have increased its value almost fifty-fold, turning it into £49.22 (£15.01 inflation adjusted).

These figures showed how stock markets can help investors fight inflation, but with a lot more volatility along the way, Khalaf said.

The technology sector is easily the biggest winner of the last 40 years, thanks to the rip-roaring growth of US tech giants such as Apple, Amazon, Microsoft and Tesla.

A technology fund would have turned £1 into £65.31 over that time (£19.92 in real terms).

Nobody would invest just £1 in an investment fund, but a £1,000 investment 40 years ago would be worth a staggering £65,310 today.

That is despite the sector having a rough ride in 2022, with New York's tech-focused Nasdaq index falling by a third.

Yet now could be an exciting time to invest in tech again, with the Nasdaq rebounding by 17.26 percent so far this year.

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There could be more to come as tech moves “back on top”, according to David Older, head of equities at fund manager Carmignac.

Tech stocks became expensive and overvalued but last year’s sell off changed that.

Valuations are now well below their peak and the profit outlook is promising, Older said. “With new excitement around artificial intelligence (AI), tech should continue to perform well going forward.”

Technology companies are working hard to boost profitability, with Elon Musk cutting Twitter’s headcount by 75 percent and Facebook owner Meta Platforms slashing spending, too.

This should lift margins and earnings while AI could deliver the next “iPhone moment”, Older added. “It could deliver revenues very quickly, as illustrated by Microsoft’s launch of several AI-enabled products already.”

Private investors can invest in the sector through established funds such as Technology Select Sector SPDR Fund, Polar Capital Technology Trust, the Allianz Technology Trust or T. Rowe Price Global Technology Fund.

By investing inside the £20,000 stocks and shares Isa allowance, they can take their returns free of tax.

However, they must approach tech with caution, said Victoria Scholar, head of investment at Interactive Investor. “While it can be highly rewarding, it can also be risky. Only invest as part of a balanced portfolio that includes lower risk shares, as well as cash and bonds.”

Whether investing £1 or £10,000, never invest in shares for less than five years, to allow time to recover from a stock market crash. For best returns, aim for 20, 30 or even 40 years.

With luck, your pounds could be worth a lot more than today.