Guide to investing in physical gold within a SIPP / Pension

Why place physical gold in a pension?

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Investing in physical gold for your SIPP has several benefits, and is becoming more and more popular. Income tax rebates and tax breaks mean that SIPP investment is one of the most tax-efficient forms of investment in an already tax-efficient commodity, and physical gold’s historic reputation as a long-term safe-haven asset means that it carries less risk than the more restricted investments of more traditional pension funds.

However, your SIPP investment will work slightly differently than purchasing physical gold for a regular investment. Your pension fund will own your gold, rather than you, meaning that your own control of this investment is more limited. SIPP funds will also have their own admin fees to consider, although these are usually fairly low as SIPPs are designed to be efficient. Always take professional advice when it comes to pensions and fees.

What is a SIPP

Self-Invested Personal Pensions (SIPPs) are a highly tax-efficient way to save for your retirement. While traditional pensions tend to limit investment choice to specific funds, SIPPs allow you to choose your own investment and invest in areas that have long-term value, such as physical gold.

If your specific SIPP doesn’t support gold investment, it’s possible to open several simultaneously for greater flexibility.

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SIPPs are also subject to the same 45% income tax relief as other pensions, with no capital gains tax and no UK income tax to pay, depending on your circumstances.

You can start withdrawing money from a SIPP from the age of 55 onwards, and properly managed these pensions can provide a comfortable retirement arranged on your own terms, with much more freedom than other forms of pension investment.

The rules around gold in SIPPS

In 2006, the UK government allowed physical gold to be held in a Self Invested Personal Pension. But it was very specific about what kind 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 (not coins) and be of investment-grade with a minimum purity of 995 out of 1000 (99.5% pure).

The tax advantages of holding physical gold within your SIPP are that the government will provide tax relief between 20% and 45% depending on your tax rate. The increase in the value of your gold over time is also accumulated free of capital gains tax, which is normally paid at 28%.

Why use Arabian Pure Gold?

We are very familiar with arranging physical gold pension investments and can work with both your financial adviser (if you have one) and your SIPP provider to make the process as easy as possible.

In fact, we do this so often, we have a specific product called ‘Pension Gold’. We are able to provide gold for SIPP investment through our standard 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.

Alternatively, we can help you to find a suitable SIPP provider. We cannot give you any kind of financial advice, however, and would always recommend that you take independent financial advice whenever considering making a change to your pension.

Contact us to arrange a consultation or to ask us for more information about investing in physical gold through your pension scheme.

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Buying gold within a SIPP

Gold purchased within a SIPP is held in an approved vault, where it is segregated and allocated and fully insured by Lloyds of London. Once your new SIPP is set up, your current pension provider will send funds to your new SIPP provider.

At this point, you fill in a form (an instruction to purchase) that permits the SIPP provider to purchase a certain amount of physical gold bars.

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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 Arabian Pure Gold 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