Pensions and Physical Gold

Many people want to understand all their options for saving for retirement, including whether physical gold can be part of their pension.

In 2006, the UK Treasury agreed that Gold could form part of a personal pension plan. If you do wish to invest in Gold as part of a pension plan, you should be aware that any Gold that you purchase must be Investment Gold, as defined by HMRC . It must be in the form of Gold bars or wafers and must have a minimum purity of 995 parts per 1000. Gold coins such as Sovereigns or Krugerrands are not permitted to be invested in as part of a pension plan. Another beneficial factor when purchasing Investment Gold is that it is free from Value Added Tax. Gains made inside a registered pension are also free from Capital Gains Tax . Outside a pension, gold bars are subject to Capital Gains Tax, while UK legal tender coins such as Sovereigns and Britannias are exempt.

There are two types of pension that can hold Gold - the Self Invested Personal Pension (SIPP), and the Small Self Administered Scheme (SSAS). A reputable financial advisor should be able to guide you and tell you which may be the best scheme for your personal circumstances. Alternatively, there are many companies throughout the United Kingdom that specialise in SIPPs and SSASs. It may well be worth looking on the Internet to find a company that might well meet your needs.

Withdrawals From Pension Funds.

Many people will be aware that from April 2015 savers had the freedom to use their 'pension pots' as a form of bank account. In other words, pension holders aged 55 or over (rising to 57 from 6 April 2028) are allowed to withdraw monies from their pensions, just as they can from bank accounts. The withdrawn pension money will be treated as any other form of earnings in that particular tax year. Usually up to 25% can be taken tax-free, up to the lump sum allowance of £268,275 for most people.

But What Should You Do With This Newly Accessible Wealth?

Some advisors are concerned that many people may be tempted to cash in their entire pension fund, perhaps to make purchases such as a car or a luxury holiday. This action would, however, leave little or no money with which to enjoy retirement to the full. What must also be considered is that people are, in general, living longer, so they have to think about the fact that their pension must last longer in order to ensure that they can enjoy a more comfortable lifestyle in their 'twilight years'.

Anyone considering withdrawing a substantial sum from a pension after April 2015 should seek financial advice as to how best to re-invest the funds. Some investors hold a small share of their savings in precious metals alongside shares and other assets. How much, if any, depends on your circumstances, so speak to an FCA-regulated financial adviser.

Many people will probably never have considered investing in precious metals, imagining that such purchases are exclusively for the extremely wealthy. Nothing could be further from the truth as the availability of smaller, modestly priced Investment Gold products brings the ability to invest in Gold within the reach of everyone.

Gold has been used as money for thousands of years. Inflation reduces what paper money can buy, which is one reason some investors hold gold.

Gold has often behaved differently from shares and property, and some investors hold it for that reason. Its price can fall as well as rise. Past performance is not a reliable indicator of future results.

If and when you do decide to purchase Gold it is important to think about and research the provider's reputation and the type of Gold that is being provided by them.

At UK Bullion we offer Investment quality Gold bars and coins that can be stored at home or placed into our professional, fully insured vaults for safekeeping.

This guide is for information only and does not constitute financial advice or a recommendation to buy or sell any asset. Past performance is not a reliable indicator of future results. Precious metals prices can fall as well as rise. Please seek independent financial advice before making any investment decision.