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08 Jun 2016

Investors can now hold gold bullion in their pensions

The Royal Mint will start giving savers the opportunity to keep gold bars within its vaults as part of their pension pots, BBC News reports.

As the article notes, physical gold has legally been able to be included in Self-Invested Personal Pensions (SIPPs) since 2014, but it must be of at least 99.5% purity; the Royal Mint gold bullion has a purity value of 99.9% and therefore qualifies.

With a history stretching back a thousand years, the Royal Mint bullion launched a trading website in 2014, allowing customers to buy, sell and store bullion coins at prices that were constantly updated.

Its latest move supposedly follows the decision from the Financial Conduct Authority (FCA) in 2014 to include physical gold in its list of standard assets. Savers will be able to store gold bullion bars in the Royal Mint vault - located in South Wales and guarded by the Ministry of Defence - for a fee of 1% per year, plus VAT. The storage costs for the Signature Gold service is 0.5%, plus VAT.

Commenting on the news that gold bullion would be available for holding within pension schemes, Royal Mint director of bullion Chris Howard said that it “opens us up to a whole new marketplace.”

Gold is also free from Capital Gains Tax, although withdrawals are taxable at standard rates, which could make it an appealing investment option for some. However, financial experts are warning that gold isn´t necessarily the place to put your money.

Hargreaves Lansdown´s Danny Cox, for example, stresses that “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,” he added.

While the value of gold rose impressively from $287 per ounce to $1,837 per ounce between 2000 and 2011, it has since dropped back to $1,253.

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