Turning Your Pension into Gold: Tax advantages of pension investment in gold

As a UK citizen, investing in gold through a pension can be highly tax efficient - via savings made in various tax and Pension Commencement Lump Sum (PCLS) rules.  

Income Tax savings – depending on your personal circumstances, you could be entitled to up to 45% Income Tax relief on your contributions into your Gold Pension, subject to the maximum annual allowance of £60,000 (for the current 2025/26 tax year).  

For example, if you are a standard rate taxpayer (20%), a personal net contribution of £12,000 over the year (e.g., £1,000 per month) into your Self-Invested Personal Pension (SIPP) or Small Self-Administered Pension Scheme (SSAS) will receive £3,000 in basic rate tax relief from HMRC for that tax year, resulting in a total gross contribution of £15,000 into your Gold Pension.  

If you are a higher-rate taxpayer (40%), you can claim an additional 20% tax relief via your Self-Assessment tax return. This means you could reclaim a further £3,000, bringing your total tax relief to £6,000, making the effective cost of your £15,000 Gold Pension contribution, £9,000.  

If you are an additional-rate taxpayer (45%), you can claim an extra 25% tax relief via Self-Assessment. This would mean reclaiming a further £3,750, bringing your total tax relief to £6,750, and making the effective cost of your £15,000 Gold Pension contribution, £8,250.  

Note: Only the basic rate tax relief (initial 20%) is added to your pension automatically. Any higher or additional rate tax relief must be claimed through self-assessment.  

Meanwhile, Value-Added Tax (VAT), Capital Gains Tax (CGT) and Inheritance Tax (IHT) are all currently exempt on gold held within a pension, with IHT relief applying until 6th April 2027 under current rules.  

In addition, a PCLS of up to 25% of the value of your Gold Pension (subject to a maximum Lump Sum Allowance (LSA) of £268,275 for the current 2025/26 tax year) is available as a ‘tax free lump sum’ on reaching normal minimum pensionable age (NMPA) which is currently 55 years, increasing to 57 years from April 2028.  

20 Jan 2026 | Categories: Gold, Bars, Investment strategies, UK Gov, Pensions