Gold Vs Pension

[Gollop]

Thought it might be interesting to see how people view investing in gold vs pensions. This would relate to wealth generation only and disregard the collection of the coins themselves. Be great if there is a worked example or graph lurking....

[dicker]

So this is a question that really needs actuarial analysis!

Its a big and complex question that depends on your tax status, earnings and appetite for risk.  A “look back” over 20 years is possible with time and analytics skills but isn’t a guide to the future.

If you want gold in your pension then perhaps one of the gold funds.

[Dankanugget]

I have asked my pension provider to swap over my pots into gold  which was met with ...we dont invest in that.

I am in a long term growth plan of medium risk which is if say 5 different schemes within my pension plan.

I pay into BRASS which is an extra offset against my tax which saves tax free amounts into a holding account within the normal pension plan.

It's volatile as it floats on various schemes on the stock market which is risky.

I aim to take my pension and still work after 55. The problem is the tax bill is enormous so I spoke to HMRC.

The said I could lower the tax bill on my salary by investing in gold via a dealer and they keep it with them.

It lowers my tax bill by about 20% which I thought was a great option.

The only thing is I don't hold it.

[margin]

You can put certain physical gold into a SIPP. I looked into it but didn’t want to go through the admin

https://www.royalmint.com/invest/gold-for-pensions/

[Dankanugget]

Thanks for the info

Edited January 7 by Dankanugget
Already seen answer

[JohnA1]

Here is a view of the equivalent situation in the States.

Can of worms, full of scamsters

 

I've had a look at the UK based gold pensions business and wasn't impressed by their margins or the annual insurance and storage costs (on top of the SIPP annual fees). Not much competion in that sector, so it is take-it-or-leave-it

In the end it was a no-go for me due to those funds not being eligible for a SIPP, but the whole pricing structure put the brakes anyway. If I were to go ahead I'd look hard for any competitors, just in case they are less uncompetitive.

They know HMRC is holding you by the curlies and you're looking for the next best thing to physical holdings.

[Coverte]

22 hours ago, Gollop said:

Thought it might be interesting to see how people view investing in gold vs pensions. This would relate to wealth generation only and disregard the collection of the coins themselves. Be great if there is a worked example or graph lurking....

There are a small number of specialist firms who can enable you to hold gold (not your self stored 'stash') which you can then put into a SIPP - the same type of firms who can enable a SIPP to own other physical items including both property and land.

Edit - just noticed the RM link - that's probably the most expensive way of doing it, one I would not recommend.

Edited January 8 by Coverte

[Silverlocks]

23 hours ago, Gollop said:

3Thought it might be interesting to see how people view investing in gold vs pensions. This would relate to wealth generation only and disregard the collection of the coins themselves. Be great if there is a worked example or graph lurking....

In the UK you've got a few basic options:

ISA: can hold funds, stocks and suchlike, but not gold.  Money goes into an ISA after tax and is shielded from CGT.  Also, no tax is paid on money taken out of an ISA as it's already been taxed before it goes in.  The maximum you can put into an ISA is currently £20,000 pa.

SIPP or SSAS: Money goes in upstream of tax, including corporation tax in the case of a SSAS, but they have significant overheads so only cost effective on large portfolios. You can keep much the same sorts of investments in a SIPP or SSAS as an ISA, and also commercial property and some other items including gold.  Gold must be vaulted with a third party providing a gold pension service.  Gold held in a SIPP or SSAS is shielded from capital gains tax.  If you take more than a certain amount of one of these vehicles per year, you will pay tax on what you pull out.  A SIPP can take £40,000 pa, and a SSAS has no effective limit.

Physical: Downstream of tax.  You can't hold significant amounts in a company without it becoming an investment company that attracts higher rates of corporation tax.  Physical attracts CGT unless it's CGT exempt legal tender such as Britannias or Sovereigns.

As to the performance, you can see historical performance of gold and various indexes, and there's any amount of punditry on the interwebs, including here on TSF.  Gold can be kept as a hedge in a mixed portfolio. 

For most folks on a salary, some mix of ISAs, company pensions (especially if the employer matches your contribution) and physical gold held in a CGT exempt form is probably optimal, but this is not financial advice.  Do your homework.  For people earning more, the optimal structure is likely a SIPP or SASS, and  some money taken out downstream (i.e. wearing the tax) to put into a mix of gold and ISAs in case you need a lump sum that isn't going to get clobbered for tax.  Again, this is not financial advice.  Past performance is no indication of future value, do your own homework etc.

[Shinus73]

I just view my physical gold / silver holdings as an alternative pension.

I have an old final salary pension which will be worth £4-5 thousand per year, a SIPP, precious metals and whisky.

They're all my pension.

[Uksilverstackers]

I just look at it this way....

One can cash in 100% of the gold they hold and discretely, pensions nope, you get what ya given, maybe taxed on it and generally you or your family will never get all of it.

Pick ya Poison.....