Guide to buying physical gold bullion through a SIPP pension
Important: Physical gold is not regulated by the FCA and is not covered by the FSCS. Its value can go down as well as up. Past performance is not a reliable guide to the future. Always take professional advice when considering a change to your pension.
Why place physical gold in a pension?
In 2006 the government made it possible to purchase physical gold bullion through a SIPP, providing an avenue to gold ownership for those whose savings are primarily held within a pension. Many of the same benefits that people consider when using gold to protect their accessible savings are equally applicable when it comes to pensions. For example, counterparty risk reduction and physical diversification.
However, SIPP purchases work slightly differently than purchasing physical gold in normal circumstances. For example, it would be your pension fund that owned your gold, and not you directly, and you cannot choose to store it yourself at home. The SIPP fund will also have their own admin fees to consider, as well as the storage fees.
What is a SIPP
Self-Invested Personal Pensions (SIPPs) are designed to be a flexible and tax-efficient way to save for your retirement. While traditional pensions tended to limit investment choice to a few specific funds, a SIPP allows you more freedom to make your own investment choices. Depending on the SIPP provider and scheme, that also includes purchasing specific assets (within a controlled list) such as physical gold.
An individual can have many pensions at once, so if you don’t have a SIPP (or you have a SIPP already, but the prover doesn’t support purchasing physical gold), it is straightforward to open a new SIPP specifically for the purpose of purchasing physical gold.
If this is something you are considering, then your first step should be to seek professional financial advice, for example by consulting an Independent Financial Adviser.
SIPPs are subject to the normal rules around pensions, which include receiving income tax relief of up to 45% on contributions. The Pure Gold Company cannot provide any financial advice, or advice what you should or should not do with a pension. What we can do is work with your adviser and SIPP provider to make the process of purchasing gold through a pension easy.
The rules around gold in SIPPS
In 2006, when the UK government allowed physical gold to be held in a Self Invested Personal Pension, it was very specific about what forms of gold would be acceptable:
To take advantage of the tax benefits of a pension, any gold must be in the physical form of bars (so not gold coins) and be investment-grade gold bullion with a minimum purity of 995 out of 1000 (99.5% pure).
The gold must be securely stored in a professional facility, under the name of the SIPP itself. The individual who is benefitting from the SIPP cannot store the gold themselves, or simply take the gold from their pension whenever they want to.
Whilst gold bars can be purchased VAT-free, they are not CGT exempt. However, the “tax wrapper” effect of the SIPP overrules that, so any investment gains made are tax-free within the SIPP. When you subsequently take your benefits from the SIPP (the SIPP would sell the bars), the normal pension tax rules would apply.
Important: Physical gold is not regulated by the FCA and is not covered by the FSCS. Its value can go down as well as up. Past performance is not a reliable guide to the future. Always take professional advice when considering a change to your pension.
Why use The Pure Gold Company?
We are very familiar with arranging SIPP purchases of physical gold and can work with both your financial adviser (if you have one) and your SIPP provider to make the process as easy as possible.
We operate on a standardised four-step buying process: consultation, creation of a purchase order, payment (available via bank transfer or debit card for some smaller transactions) and storage.
If you already have a SIPP then please first check with your SIPP provider that your scheme supports physical gold investment, and follow your provider’s specific processes for purchase and investment when contacting us. We recommend speaking to a financial adviser first.
Alternatively, we can help you to find a suitable SIPP provider who is already familiar with physical gold purchasing. We cannot give you any kind of financial advice ourselves.
Contact us to arrange a consultation or to ask us for more information about the practicalities of buying physical gold through a pension scheme.
Buying gold within a SIPP
Gold purchased within a SIPP is held in an LBMA-member vault, where it is segregated and allocated in the name of your SIPP, and fully insured by Lloyds of London. If you need to set up a new SIPP for this purpose, then your current pension provider will send funds to your new SIPP provider once it is in place.
Once the funds are available to the SIPP, you fill in a form (an “instruction to purchase”) that permits the SIPP provider to purchase a certain amount of physical gold bars with these funds.
Making the transaction
Funds are then transferred to us and we will run through the ins and outs of the different types and sizes of gold bars to be purchased upon the allocation stage to make sure you know exactly what is in your pension.
Any bars that you purchase through The Pure Gold Company will be from LBMA providers – this is an important point. Once the allocation is complete, you will be sent your paperwork (Transaction Invoice, Storage Agreement, Certificate of Authenticity) secure in the knowledge that your scheme can sell your gold when the time comes without any problems
Discover all there is to know about buying gold
Our free Investor Guide will reveal:
- How to buy physical gold
- Timing & pricing considerations
- Our buy back guarantee
Discover all there is to know about buying gold for investment
Our free Investor Guide will reveal:
- How to invest in gold
- Timing & pricing considerations
- Our buy back guarantee