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Pensions and Physical Gold
Most people will already be aware of the fact that in recent years traditional pension plans have not performed very well, leaving many people very concerned that even though they may have paid into a scheme for many years, they will not have enough money to see them through any difficult financial periods in their old age.
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. Also, even if the value of Gold increases, should you wish to sell your Bullion it will be exempt from Capital Gains Tax. You should also be aware that any Gold investment over £10,000 will be notified to HMRC.
There are two very effective savings plans for anyone with a pension who wishes to own Gold - the Self Invested Personal Pension (SIPP), and the Small Self Administered Scheme (SASS). 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 SIPP's and SASS's. 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 over the age of 55 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 The withdrawn pension money will be treated as any other form of earnings in that particular tax year. Under the regulations a person will be able to make a withdrawal from their pension fund and the first 25% will be tax free.
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. Generally accepted advice states that a balanced investment portfolio should contain between 5% and 15% of the entire value in Precious Metals to act as a balancing influence when combined with traditional investments such as stocks and shares.
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 is one of the oldest currencies in the world; the purchasing power of Gold has hardly changed for the last 300 years. Owing to deflation, paper money becomes devalued and for this reason many investors believe that by investing in Gold their savings will be much safer. For example, if investments are made in stocks and shares there is no steadfast guarantee that they will hold their value. A large number of people have lost a lot of money when, for instance, the Stock Market has crashed, yet over the last 12 years or so the value of Gold has increased by more than 500%. Diversifying to Gold investment limits unforeseen financial dangers as Gold reacts differently to many other modern investments such as property or equities. Gold would be more likely to increase in value when the value of other investments decreases. When the economy is underperforming, the Gold market price usually increases.
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, at extremely competitive prices, that can be stored at home or placed into our professional, low cost, fully insured vaults for safekeeping.