It is a question on many a keen investor’s lips these days — where is the best place to put my money? Plummeting interest rates have meant traditional banks’ saving accounts offer very little, while the stock market has fallen.

There are alternatives such as collectable cars, of course, but they are an expensive outlay and cost money for their upkeep.

What is required is something that can be obtained for a reasonable cost and yet could offer a decent return. Now, in these gloomy economic times, experts are suggesting stamps could be the answer.

Staff at Universal Philatelic Auctions (UPA) have never been busier. Based near Chipping Norton, the business runs four auctions a year, each more popular than the last.

Unlike a traditional auction, UPA does not sell on behalf of other people and no commission is charged. The auctions are held quarterly and the most recent which closed this week was the biggest ever with 12,900 lots ranging from £1 to £12,000, and worth a total of £440,000.

And what does not sell is put into the next auction at an 11 per cent reduction, which rises by one per cent every time if the stamp does not find a new owner.

UPA was set up nine years ago by Andrew McGavin, who, like many children of his generation, was a keen stamp collector.

But, unlike 99 per cent of his peers, Mr McGavin went on to make a career out of his hobby. In fact, so determined was he to work with stamps, that he turned down a university place in the early 1970s to pursue his dream.

He found work as an assistant manager with London-based Direct Philatelic Supplies (DPS) in 1974, and he quickly developed a reputation as a rising star in his chosen field, to the point where he received several other job offers and DPS finally made him a challenging offer he could not refuse.

Mr McGavin, 54, said: “They told me they had stamps they could not sell. If I could sell their junk, with the money raised I could buy and sell whatever I wanted.”

Within a couple of years he had converted that ‘junk’ into £13,000-worth of stock but disaster struck when he had it stolen. It was not insured, and so he was forced to start again.

One day he was talking to another dealer and his foot kicked a box which turned out to be Postal Headquarters (PHQ) cards, specially designed postcards produced by the General Post Office.

He bought them and started looking for more, eventually spending £15,000 in six weeks. But looking at adverts in stamp magazines, he realised he was sitting on a healthy profit. Soon he had converted the £15,000 into £100,000.

Then recession hit in the 1980s and, again, Mr McGavin suffered badly.

“I had too many large clients owing me too much money and I decided that I had to rebuild the business in a different way, using a lot of smaller clients.”

By the early 1990s he had about 1,500 clients buying stamps from him and later he decided interest was such that he should start running an auction.

Universal Philatelic Auctions (UPA) operates by sending catalogues to about 4,000 clients all over the world who then make a bid for their choice. UPA has offshoots including an approvals business in Tewkesbury, where individual stamps are submitted for valuation, while the mixtures department dealing in loose stamps generates about £1,000 a week.

Then there is the eBay department which involves the sale of surplus stock. Customers are then offered an auction catalogue in a bid to draw them into further purchases and there is no shortage of takers.

Mr McGavin said: “I have never seen the market this firm. While I would not say stay it is recession-proof, there are some good returns.”

He quotes the example of a £5 orange Victorian stamp which ten years ago was worth £1,000 and can now command £3,000.

And as we slide into recession, Mr McGavin believes interest can only grow.

He said: “There are three things that are keeping stamps popular as the economy suffers.

“Firstly, many stamp collectors tend to be aged over 60, meaning they are less likely to have a mortgage and be affected by day-to-day rises in the cost of living.

“Secondly, stamps tend to hold their value over the long-term. At the moment they are seen by collectors as an enjoyable hobby with profit potential.

“Finally, the Internet has been kind to stamp-collecting. Demand is truly international and valuable stamps can be easily shipped worldwide.”

But to gain value on your investment with stamp collecting, you really have to know what you are looking for, as some stamps issued 30 years ago are worth less than their face value.

Mr McGavin said: “It is a question of supply and demand. You have to buy examples already in limited supply.”

He points out that there were 66 million examples of the Penny Black printed which means that a poor quality example may only fetch a few pounds, but they can trade for as much as £6,400, depending on condition and perhaps errors in the printing or perforation.

My curiosity aroused, I predictably question Mr McGavin on the possible value of my childhood stamp collection which contains a couple of Victorian examples, much prized by myself at the time.

However, on revealing their details and condition, they are still worth little more than their face value, although Mr McGavin was happy to indulge me and even offered to examine my Stanley Gibbons album, just in case there maybe a rare gem inside.

Talking to him, it becomes clear that value is only part of the story of stamp collecting.The educational worth of looking at stamps from across the world cannot be underestimated and I remember swapping and buying new examples was all part of the fun.

Not surprising, then, that Mr McGavin believes many people return to stamp collecting in their 50s and 60s after spending their adult years away from the hobby, when they again have time to appreciate the fascination with the coloured pieces of paper.

Who knows, one day I may join them.