Gold in Your Pension: Add a Little Sparkle to Your Pension Pot

Gold in Your Pension: Add a Little Sparkle to Your Pension Pot

Gold holds a special place in our history and continues to keep a hold on our imagination, even above jewels like diamonds. So, when the Royal Mint announced in 2016 that it was allowing pension owners to store gold bars in their portfolios, it received plenty of interest.

But, if you don’t quite understand what the benefits are of doing this, our latest blog should clear up anything that you’re struggling to get your head around.

What is Actually Being Offered?

From June 2016, HMRC allowed pension owners to buy gold bullion and hold it in a pension plan known as a self-invested personal pension, or SIPP for short. SIPPs are customised pension funds that allow the holder to manage their portfolio and choose which assets to invest in.

Traditionally SIPPs have been used to hold all kinds of diversified options, but up until 2016 gold wasn’t a widely available option.

Investors can now purchase and own a wide selection of bullion, ranging from 100g to 1kg. However, it is important to remember that the investor does not technically own the gold – it belongs to the pension scheme and needs to be held in custody by a professional outfit.

HMRC have strict requirements when it comes to pension gold which involves investment-grade gold bars with a purity of no less than 99.5%. This is why silver, platinum, palladium and gold coins are not eligible for pension investment. 

Is it a Good Option?

Gold is a huge attraction, because, amongst other things, it is a great backup option should investors start to get twitchy with other assets. It weathers black swan events and provides an assured support for temperamental economies and paper currency.

During periods of financial instability (caused by geopolitical uncertainty) gold often becomes the go-to asset for investors, and this is when it comes into its own. However, when the economic and political landscape appears generally untroubled, gold works as inflation protection and economic collapse insurance.

There are numerous potential benefits to investing gold into your pension pot with Sharps Pixley:

  • Tax relief up to 45%.
  • Free from VAT & Capital Gains Tax.
  • 100% allocated and segregated.
  • No counterparty risk.
  • Protection from market collapse and geopolitical unrest.
  • Certified and authenticated.
  • Secure vaulting insured through Lloyd’s of London broker.
  • 99.99 % purity bars.

Other Tips to Give your Pension a Boost

Whilst gold is a great option, it can often take more than one asset to help your SIPP or SSAS achieve its full potential. But, if you are considering this route, consider a few other options:

  • Make sure you’re fully aware of the different asset classes which your SIPP can invest in.
  • Balance your pension with a mixture of assets.
  • Monitor your SIPP on a regular basis to ensure that one or more assets aren’t creating an unbalanced portfolio.
  • Consider moving any other savings into your pension once you reach 55 in order to make the most of tax reliefs.

 At Sharps Pixley, we can work with your current provider or you can let us know if you don't have a provider and we can supply you with a list of FCA regulated providers that we have worked with.

For more information, you can visit our London showroom on St. James Street or contact us and we’ll be happy to provide you with any assistance you may need to begin this exciting process.