Gold a great plan for a pension. Pension Gold can be bought as a hedge to protect finances in times of economic crisis. It is sold worldwide and whilst the price may fluctuant it is regarded a relatively safe investment. The price of gold is often correlated with crude oil, which over current years has been increasing.
In April 2006, the UK Government updated pension parameters to allow for the investment of physical gold into pensions, supporting the notion of a more balanced, and therefore protected retirement wealth. Relaxed rules also mean a more flexible lifetime limit for contributions, so you can save more when you can afford it. It is also possible with some personal pensions to choose to draw your income direct from the scheme through income withdrawal, subject to limits, rather than cash in and buy an annuity from an insurance company. The new rules now allow income withdrawal to carry on beyond age 75, subject to stricter rules.
SIPP.
The type of pension required to house gold is called a Self Invested Personal Pension (SIPP). These benefit from the flexibility of the updated legislation and can house a mix of traditional paper assets with tangible assets such as commercial property and now investment grade gold.
This can be achieved if you have no current pension provision but want to open a SIPP, or if you have an existing pension which you wish to transfer into the more flexible structure. A SIPP can even be opened alongside existing personal or company schemes to allow versatility.
Investments are chosen by you, and the SIPP provider acts as a fund trustee. When retirement comes, the capital provides an income which can be drawn either directly from the SIPP (subject to limits) or via an annuity purchased from an insurer. The SIPP trustee takes care of wrapping all these investments into one portfolio, while assuring that reporting and legal obligations are met.
Here at Physical Gold, we are a member of the National Association of Pension Funds and have teamed up with an extensive number of the leading alternative asset pension providers to offer you gold in your pension. Our Sipp partners have led the way with offering the most diversity possible into UK pensions, and are expert at handling alternative assets and providing any specific technical assistance.
You can establish a SIPP either directly or by using an Independent Financial Advisor (IFA) of your own to guide you through the risks and rewards of the various asset classes on offer, before you make any decisions. If you proceed, the paper work will be taken care of, and the gold will be stored in a licensed depository on your behalf by the trustee. We operate on a fully allocated and segregated basis, providing you with the ultimate security. Your gold is fully insured through Lloyds of London and is stored to the highest depository standards to maintain the utmost integrity.
There are both initial and ongoing fees associated with opening a SIPP. You should consider the impact of these fees on your level of intended investment before proceeding.
Good Delivery Bars.
The type of gold required for a gold Sipp has to be of purity not less than 995 thousandths, and in the form of a bar. These ‘Good Delivery Bars’ are recognized by the bullion market and the high purity levels mean you own more gold content for your money.
Gold is the only physical commodity you can currently hold directly in a SIPP.
The London Bullion Market Association (LBMA) maintains a list of accredited refiners who produce these bars, and stipulate that these bars be stored in special vaults for integrity and correct handling and storage.
Your gold will be in the form of small 1oz bullion bars, providing you the flexibility to sell any part of your gold holding at any time. These bars are fully allocated to yourselves and segregated from other holders.
Balanced Portfolio.
A SIPP can provide the ultimate flexibility for pensions, and therefore facilitates more balance within your portfolio. More balance, means fewer nasty surprises when other holdings drop in value. Gold is especially appropriate to those entering the last 10 years before retirement who are looking for some protection over their pension value. The current economic downturn has perfectly illustrated how these assets can all move down in value together, shrinking pension pots, and leaving most people concerned about the reduced standard of living they’ll achieve once retired.
It also provides a great hedge against aggressive high yield and emerging market equity schemes – for those a little younger, who are looking for capital growth. Physical gold provides balance for two reasons. Firstly, its characteristics are totally different to paper assets as it has no counter party risk. More obviously, gold tends to rise in value when many of the traditional assets fall, providing the portfolio insurance every pension should have.
VAT.
Like other forms of investment gold, there is no VAT applicable to gold bars.
Efficient Investment.
The low cost of purchasing gold into a pension is illustrated by two factors.
Gold receives the same tax relief as other qualifying assets when bought as part of a pension. So, for top rate tax payers, that means a whopping 50% off the price of gold.
Secondly, for many of the securities products which dominate pension portfolios, management costs have steadily escalated, eating away at their tax efficiency. Investing in physical gold attracts far lower management fees, less than one tenth of the charge applied to a typical unit trust.
SSAS.
A small self-administered scheme (SSAS) is an occupational pension scheme set up under trust with fewer than 12 members. Since A-day the requirement for a professional trustee has been removed, although the majority of SSASs still employ the services of an independent trustee who is well versed in legislation and HM Revenue & Customs (HMRC) practice.
The SSAS is as flexible for taking benefits as any pension vehicle available in the market. There can be partial or full crystallization of a member’s fund with a tax-free lump sum payable and pensions can be paid under unsecured pension (USP) before age 75, alternatively secured pension (ASP) after age 75, or indeed by scheme pension.
A SSAS is able to purchase all of the same assets that qualify for a SIPP, so gold bullion is now a viable option for those company schemes seeking balance, growth and protection. For US investors, find out how you can invest into a Gold IRA.
Investors in the USA may wish to learn how to invest into a Gold IRA.
Sipp Investment.
Sipp is a self-invested personal pension that has been approved by the government and allows us to make personal investment decisions from a full range of HM Revenue and Customs approved investments. Gold is an approved method for investing in for a pension plan and Physical Gold can help you find the right self-invested personal pension.
Gold bullion is allowed to be bought, leased or sold within HM Revenue and Customs guidelines and is specifically allowed for in legislation. It is also a great investment plan due to its lack of tax charges. Capital Gains Tax is a tax applied to the gain or profit you make when you sell anything, give away or otherwise dispose of something. Most gold investors never have to pay any Capital Gains Tax as it only applies if you make more than £10,100 of profit in one year. This is not necessarily the amount you sell gold for but how much you make on it.
Sipp Gold
Sipp Gold became an approved investment plan in 2006 and has since seen millions of people buy gold as an asset for their pension. It is possible to invest in gold at any time in your life, at any age as a plan for later life.
Pension Gold Investment
Pension gold investment can be used alongside cash and other assets in order to make as much interest and cash as possible over a long period of time. Physical gold can help you discover how much gold you would like to invest in, the quality and how long of a period of time you would like to buy and sell it over. One of our expert advisors will be here to inform you of the best and worst times to trade gold and to keep track of your sipp gold throughout the whole process.