Savings come in a variety of forms; savings, investments, and pensions being best forms.
For a long time, it has been possible to invest in gold, or buy gold. There are many and various schemes, ranging from investing in gold, speculating on gold markets, or buying gold specie. Gold is often reccommended as an investment, or a savings instrument, as it is stable, and gives steady, dependable returns. However, rising prices and high demand have made gold lose its lustre in recent years. It is no longer the safest commodity to invest or to have savings in. However, gold will always have a high value, and be considered as a safe investment.
Indeed, such is its value that gold can now be part of your pension. Under a new scheme, for the first time government gold bars can be bought, and added to your pension scheme. Any interested investors will be able to buy 100g or 1kg gold bars – or even a fractional amount of a much larger 400oz good bar. The gold would be kept securely on your behalf, as it would remain stored at the Royal Mint. The Royal Mint has a massive vault at Llantrisant in South Wales which is guarded by the Ministry of Defence.
In some respects this is nothing new, as physical gold has been eligible to be included in Self-Invested Personal Pensions (SIPPs) since 2014. As part of a pension arrangement, gold is usually free from Capital Gains Tax – although any withdrawals are taxed at the usual rates. Under the plan, to qualify for inclusion in any pension scheme, any gold bar needs to be of at least 99.5% purity; fortunately Royal Mint gold bullion has a purity value of 99.9%. Further, pension investors will be charged up to 1% a year for the privilege of buying the gold bars- plus VAT. It has been possible to buy gold bullion from the Royal Mint previously – but this is the first time it is possible to do so a part of a pension fund.
Gold is often advised to be a part of a savings portfolio – and now physical gold can be part of a person’s pensions scheme. Diversity is often recommended for savings and pensions, as well as maximising returns. Although the returns from gold are rarely spectacular (especially in today’s markets), it is a safe, steady bet.
Whatever the appeal of owning physical gold, or of adding gold to a pensions fund, caution is advised. Concerning investing in gold bars, Danny Cox of investment platform Hargreaves Lansdown said that “investors need to understand investing in gold is by no means a one-way bet.”
“Gold is notoriously difficult to value, subject to seasonal demand, and unlike shares and bonds, it provides no income for investors… Given an improving economic outlook and the prospects of interest rate rises in the US and UK getting closer, it is hard to see how gold gains many more followers from here, unless economies and central bank policies go into reverse.”
To illustrate this, between 2000 and 2011 the price of gold was seen to rise spectacularly, from US $287 an ounce to US $1,837. The price per ounce has since fallen to US $1,253. It is usually considered to be a worthy investment to protect against the effects of any inflation, the fall in value of a particular currency, or a collapse in the market value of stocks and shares.
Although gold is a safe investment – it is not all the shiny investment it seems. As an addition to a pension fund – owning a few bars of gold certainly cannot harm any retirement plans.