Jasmine Birtles
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Why Gold Coins Are a Smart Addition to Your Retirement Plan
Ruby Layram
20th Dec 2024
Planning for retirement is no walk in the park! It involves assessing different investing strategies and routes to find a solution that offers security, growth potential, and, ideally, tax efficiency.
Building a comfortable retirement plan isn’t just about pensions! The best way to create a comfortable, long-term pot for yourself is to spread your investment across various assets that tap into different benefits.
Gold coins have gained popularity among UK investors as an intriguing addition to retirement strategies. They come with tax benefits, inflation protection, flexibility, and even sentimental value.
In this guide, I will take a look at why Gold coins might be an excellent addition to your retirement plan and how to start investing in them.
Gold Coins Come with Tax Benefits
First and foremost, Gold coins are a tax-efficient investment that could help you to minimise the tax that you pay on your retirement pot.
According to The Bullion Club, “Gold coins from The Royal Mint offer complete exemption from CGT, thanks to their Legal Tender status. This means every ounce of profit is yours to keep, no strings attached. Unlimited, tax-free gains make these coins a lucrative choice for investors.”
Imagine you’ve invested £10,000 in gold Sovereigns and their value appreciates to £20,000. Unlike selling property or stocks, you won’t owe a penny in CGT on the £10,000 profit. Given the recent reductions in CGT exemptions, this makes gold coins a tax-efficient investment that stands out from many alternatives
Furthermore, as of 2000, Her Majesty’s Revenue and Customs abolished VAT on gold of a purity of at least 99.5%. This means when you purchase gold coins, you won’t pay the additional 20% tax applicable to many goods. This makes Gold coins a more lucrative investment option than Gold jewellery pieces.
Gold Can Be Used to Hedge Against Inflation
If you’re likely me, the word inflation probably makes you sign. And for a good reason! Inflation decreases the value of your money over time, which is a nuisance for savers!
However, unlike cash, Gold has historically maintained its purchasing power over time. In fact, the price of Gold often rises during periods of economic uncertainty or high inflation, making it an ideal inflation hedge.
For retirees, who rely on fixed incomes or savings, gold coins can act as a financial safety net.
According to The Bullion Club, “Historically, gold has been proven to outperform traditional asset classes and acts as a powerful hedge against inflation. £10,000 invested 20 years ago in gold is now worth £90,471.88 – giving a total ROI of 804.72%, growing more than 40% per year on average”
In 2022, when inflation in the UK surged to record highs, the price of gold remained robust, underscoring its reputation as a stable store of value. Investing in gold coins ensures that a portion of your retirement portfolio is shielded from the dwindling value of cash.
Gold Coins Are More Flexible than Bars
When you think of buying gold, your mind might go straight to picturing a pile of shiny gold bars stacked up in a safe somewhere. So, you might be wondering, why coins and not gold bars?
While gold bars are a popular option for investors, gold coins offer much more flexibility. Coins like the Britannia or Sovereign come in various denominations, making them easier to trade or sell when needed.
If you own a 1kg gold bar and wish to sell part of your investment, you’d need to sell the entire bar. With gold coins, however, you can sell smaller portions as needed, preserving the remainder of your investment for future use. This flexibility is particularly advantageous during retirement when your cash flow needs might vary.
Gold Coins Come with Collectible Value
Certain gold coins come with historical and collectable value, adding an extra layer of appeal to your investment.
Coins minted in limited editions or tied to significant events, such as commemorative Sovereigns, often carry value beyond their gold content.
The collectable value can grow over time, providing potential for additional returns. For instance, a 1989 Royal Mint Sovereign marking the coin’s 500th anniversary can be sold for anywhere between £1750-£2000 – way above the going market rate for most sovereigns.
Moreover, if you’re lucky enough to get your hands on George III Sovereigns, these can fetch well over £100k! This shows how such investments can gain value through rarity and historical significance
Gold Coins Are the Perfect Sentimental (and Smart!) Inheritance Gift
As you near retirement, it’s smart to think about the kind of wealth that you would like to leave for your family members.
Gold coins make an excellent inheritance, blending sentimental value with practical financial benefits. They’re easy to store, simple to transfer, and universally recognised. More importantly, as CGT-exempt investments, they allow your loved ones to enjoy their full value without facing hefty tax bills.
Imagine leaving your grandchildren a collection of beautiful Sovereigns. Not only do they serve as a timeless keepsake, but they also carry financial worth that can grow with time.
How to Invest in Gold Coins Through The Bullion Club
When buying Gold, it’s best to go through a reputable dealer that offers first-class service, transparency and most importantly, trust.
The Bullion Club is one of the most reputable UK platforms for buying gold coins, offering transparency, authenticity, and guidance. When investing through platforms like this, you gain access to expert advice, secure storage options, and even buy-back guarantees.
Buying Gold coins through the Bullion Club is relatively straightforward.
- Contact the team: The process starts by getting in contact with the team of experts who are based in Surrey. During this phone call, the team will answer any questions that you have about investing in Gold coins. This is a great opportunity to ask about anything that is on your mind and work with experts to plan your portfolio.
- Portfolio creation: The Bullion Club will assign a team of experts to help you to build a suitable portfolio. This takes away a lot of the guesswork and makes the process a lot less intimidating.
- Buying gold: Once you have spent time weighing up your options and have made a decision, the team will walk you through the process of securely buying Gold coins and arranging for delivery or storage.
- Verifying your account: After you have finalised delivery or storage, The Bullion Club asks that you verify your account by providing proof of ID.
- Delivery: Finally, your Gold coins will be securely shipped to your home address or sent to the Bullion Club’s vault neat Heathrow airport.
The Bullion Club provides expert support through every stage of the process which means that you can find the answers to all of your questions.
Gold coins are more than just a shiny addition to your portfolio. They’re a practical, tax-efficient, and flexible investment. From hedging against inflation to providing a meaningful inheritance, their benefits make them a valuable tool for securing your financial future.
After reading this guide, I recommend checking out The Bullion Club’s Gold investment guide to learn more about the process of buying Gold coins for your retirement portfolio.
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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
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