Baby Boomers – the Generation Which isn’t Ready for Retirement

When we speak about the baby boomer generation, we think about a number of revolutionary events that happened during the sixties. Images of flower power, the birth of rock n roll, Martin Luther King, man on the moon, the Vietnam War, the Beatles – they all come to mind. The baby boomer generation was born between 1946 and 1964. Much of what happened during their time shaped the world as we know it today. It is therefore ironic that such a futuristic generation could not plan financially to retire.

The baby boomers

According to a study conducted by Legg Mason, an American investment management firm,

Baby boomers who are now between 53 and 71 years of age would require a savings kitty of $658,000 to retire comfortably. However, the survey revealed that the average boomer in the US had only $263,000 in savings, with a large shortfall of $395,000 to cover. This gap looks difficult to cover via the existing retirement income options available to those within the age groups.

Boomers in the higher age bracket of 65 to 74, who have either already retired or are close to retirement have so far managed an average of only $300,000 in their individual savings pots, which is still not going to be enough. British boomers were not far behind. Figures released by the Office of National Statistics (ONS) show an alarming 75% rise of people in their 50s and 60s working in the UK, with no signs of slowing down.

Learn How to Add Gold Bullion To Your Pension with our FREE Insiders Guide here

Early retirement is a pipe dream for these boomers as many haven’t saved enough for the rest of their lives. Moreover, with the increase in life expectancy, more money would now be required for these couples to carry on living comfortably. Saga, the company that caters to the boomers has christened them ‘generation W’ – the working generation.

Baby Boomers
The baby boomers are known as the progressive generation of the sixties

Conservative investment approach

Part of this predicament could be linked to their investment philosophy. Many boomers were hit particularly hard by the Great Recession, which greatly impacted the economies of industrialised nations. Many lost their careers, leading them to search for alternative employment. Their risk appetite took a nosedive during this period, leading to conservative investing trends. QS Investors, an investment management company found that boomers preferred to put more money in cash deposits, allocating 30% of their investable capital to this asset class. However, with abysmal interest rates since 2008, the goose they reaped in the past ten years could hardly be called golden.

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Boomers also invested 24% and 22% in equities and fixed income products respectively. According to the new age asset allocation model put forward by an investment expert, distribution of assets between equities and bonds at the age of 60 needs to follow a ratio of 60 – 40. Of course, as we can see with the boomers, this is hardly the case. Boomers allocated only 8% in real estate and 2% in precious metals.

The boomer’s shortfall – other reasons

Of course, inflation is another factor that has eroded the savings of baby boomers. At a time when boomers could have been on their home run to make enough to beat inflation, the recession happened. Another important factor is that the new generation has also been disenfranchised by the recession, dashing their hopes of a new mortgage and financial independence.  A recent study found that people under the age of 45 in Britain owned only 900bn pounds in assets. The struggles of the new generation have put pressure on many baby boomers, who are now having to support their children.

Call our investment experts to discuss your retirement

A lucrative investable asset class missed out by the baby boomers is precious metals. Call our investment experts now to discuss how building a gold nest egg can set your mind at peace during your later years. We offer SIPP schemes as part of our pension gold packages on which you can avail of a 45% income tax relief as a UK resident. Call our investment team on 020 7060 9992 or get in touch with the team online and an advisor will reach out to you at the earliest.


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Saving for your retirement? Here’s how gold could help secure your future.

Saving for your retirement is a top priority

If you’re currently saving for your retirement, then it’s possible that you’re using a Self Invested Personal Pension (SIPP) as one of your main methods of saving.

Your SIPP will probably carry a range of bonds, funds, shares and other elements, known as asset classes, depending on how it was set up. If you manage your SIPP yourself, then you may have added certain shares to it over time. If a company manage it on your behalf, then they will likely assign your SIPP to various funds.

Download our FREE 7 step cheat sheet to gold investment here


However, did you know that you can also add gold to your SIPP?

Gold is a separate asset class on its own and can be a very valuable part of your SIPP. But why is this? How do you add gold to your SIPP and how does it benefit your pension savings?

Firstly, the reason many people have gold in their SIPP is to provide a ‘hedge’ against the other elements of their pension. Gold isn’t linked to the price of traded shares, so for example, if the markets go down, it doesn’t necessarily mean the price of gold will also fall. In fact, historically, gold has tended to rise when traded shares have fallen.

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This can help your SIPP maintain its value due to this balance. Having a diversified SIPP like this can mean that, overall, your SIPP retains its value, or at least is protected because of this diversification, if the markets were to fall.

In this way, gold can provide security and protection to your SIPP, where otherwise it might be viewed as being exposed to market crashes, regardless of which shares or funds it’s invested in.

saving for your retirement
Gold can serve as an excellent diversification tool for a retirement portfolio

Hedging against inflation

The other big reason to add gold to your SIPP is to hedge against inflation. Although the consumer price index (CPI) data shows that inflation has fallen significantly in the last four years, the current forecast for 2018 shows inflation hovering around the 2.4% mark. Infact, UK inflation fell from 4.5% in 2011 to 0% in 2015 – a huge drop. But then, in the last two years, it rose by 2.7%, a big jump. This kind of volatility in inflation rates is ample cause for worry when it comes to protecting your investments. Inflation is one of the important market forces that simply erode your investments, as the value of your nest egg diminishes as the buying power of the pound crumbles. However, investing in gold protects your investments from both these factors. As the prices of goods and services in the economy go up, so does gold, hedging you against the risk of inflation. In addition, market trends show that investors always turn to gold, when their faith in global currencies like the dollar or pound is shaken. This creates additional market demand, further driving up the prices of gold. Since you invested wisely years ago, you are able to reap your harvest now and cash in on the higher prices.

Hedging against global crisis

Yet another important consideration is to hedge against global uncertainty. If there is a constant in our world today, this is it. Now, let’s say you’re currently in your 50s. You have another 15 odd years to retire. There’s no telling whether the current global situation is going to get better or worse. The US-China trade wars are probably going to become more intensive, as India and China become economically stronger each year. The rifts and uncertainty in Europe that started with Brexit could get worse. Already, the Russian government is seriously hedging by increasing its gold reserves as are India and China. This needs to be an important consideration when saving for your retirement and you could be better off diversifying that retirement portfolio that you’re working on, by adding gold to your SIPP, by simply downloading our investment instruction form.

Get in touch to know more about adding gold to your SIPP

Adding gold to your SIPP is also easy. If you PHYS01_Animated_Gif_2_MPUalready have a SIPP, then Physical Gold can organise the addition of gold as part of your existing investment. If you don’t already have a SIPP, then we can help you set one up, and start your investment with some gold savings.

Pension gold is a great way to save for your retirement and a great way to ‘hedge’ your existing investments for a more secure future. You can find out more about how Physical Gold can help you do this here.

Call us on 020 7060 9992 or contact us online to find out more.

Daniel Fisher formed Physical Gold in 2008, after working in the financial industry for 20 years. He spent much of that time working within the new issue fixed income business at a top tier US bank. In this role, he traded a large book of fixed income securities, raised capital for some of the largest government, financial, and corporate institutions in the world and advised the leading global institutional investors. Daniel is CeFA registered and is a member of the Institute of Financial Planning.

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Pension Gold explained

Add Pension Gold to your portfolio

With pension libertaions enabling you to take more of your pension pot as a cash lump sum, now is the time to plan ahread.

Adding gold bullion to your SIPP provides balance and reduces overall volatility, so your future pension value is more predictable.

Make your pension work harder for you;

This guide will help you:

  • Learn how to make your pension work harder for you
  • Plan a tax-efficient future
  • Add balance and protection to your other assets

Video Transcript:

Planning for your retirement can sometimes be complicated and full of uncertainty.

With the threat of volatile markets, many people these days are unsure if they’ll be able to retire when they’d planned; or have the standard of living they’d anticipated. specialise in making it easy to invest in tax-efficient, solid, physical gold as part of your pension.

Gold bars reduce the overall risk to your pension by providing stability to any other investments you may have; giving you a balanced pension, for increased peace of mind.

As part of a pension investment, gold receives tax relief of up to 45% for higher tax payers; and is free from capital gains tax on any profits made on your gold bullion SIPP.

Not only that, gold is quick and easy to transfer, so if you need to change your holding at anytime you have the liquidity and flexibility to do so.

With your pension gold is securely stored in one of the UK’s leading metals depositories and fully insured through Lloydsof London.

All this combined makes gold bullion the perfect ingredient for a long term balanced pension.

So whether you already have a pension or need to set one up, have a solution to suit you. – Bringing stability and balance to your long term pension


Three savings account alternatives to beat poor interest rates

Money in a savings account is returning next to nothing. As has been anticipated for many months, the Bank of England has finally announced its decision to cut interest rates from 0.5% to 0.25%, a record low and the first cut since 2009. The UK economy is said to be contracting at its fastest rate since the financial crisis and the interest rate cuts form part of a raft of measures to try and boost it.

That’s as may be, but it certainly doesn’t give savers much incentive to tie up their money in a savings account. You may understandably be pretty put out that you’ve had to suffer historically low interest rates for over three years, whilst rates on ISAs and fixed term bonds have also been slashed. With fixed-term bond rates having fallen to an all time low, you’ll have to lock your money away for five years or more, if you want to earn anything at all over inflation.

Want the best savings returns? Read our 7 step gold savings cheat sheet.

Insider's Guide to gold and silver

Firstly, gold!

Of course, we would offer this as an option you might say, but just look at the numbers. Gold is performing exceptionally well, with the year to date gold price having grown at 40.85% at time of writing.

It consistently demonstrates itself as a sound and safe alternative to cash, which has outperformed shares over the last few years. It  will also help to ensure that your savings are not eroded through a combination of inflation and poor interest rates.

Although you won’t receive income from holding gold, the aim is to outstrip inflation through capital appreciation. One way of doing this can be through one-off purchases of either physical gold bars or gold coins. In contrast to the possible risks of electronic gold like mining shares funds – this is just solid gold as a means to proactively protect your wealth and beat bank account returns. What’s more, gold coins are tax free.

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A savings account made of gold

At a time when many financial institutions have been withdrawing their ‘best buy’ savings accounts without anything to replace them, a gold savings account can offer a very attractive alternative.

You might think you’d need thousands of pounds of liquid assets to get started in investing in gold but that‘s far from the case. Buying gold is relevant to all of us, regardless of wealth, and can just replace the amount you regularly save in the bank. There are regular gold savings options, which start at £250 per month, with no maximum. This enables you to drip feed funds on a regular basis to build up your nest egg steadily. If the scheme purchases UK gold coins, then any appreciation is tax free, making it comparable to an ISA.

And thirdly, how about a SIPP?

A well managed SIPP has the potential to outperform cash investments, but it doesn’t need to leave the safety of cash behind entirely. Cash can still be part of your portfolio and the proportions adjusted in line with your risk profile as your circumstances change, such as approaching retirement, for example. Of course, you can also hold gold bullion as part of a SIPP, which can be a worthwhile option to consider, for those wishing to add balance to their pension.

Or consider all three…  

As an overall recommendation, we would always emphasise that expert advice can help you to better structure your investments and provide a balanced portfolio rather than relying on standard cash ISAs or default bank portfolios. Professional advice can be expensive but if it comes up with some recommendations that bring you greater returns on your cash, you may find it more than pays for itself. Depending on your particular situation, the best solution may well be to consider two or three of the options discussed, providing further diversification.

So don’t despair with record low interest rates and assume the only option is to squirrel your cash away in a savings account. There are other opportunities out there and some of those are golden…

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Will your pension be raided in the Spring Budget?

spring budget

In the Spring budget of March 2014, the Chancellor George Osborne was praised for one of the most radical pension reforms in over 50 years. Previously you were forced to exchange your hard saved pension for a poor value income with an insurance company. But now, the public would be trusted to do whatever they like with their entire pension pot.

The new pension freedoms have been met with almost universal acclaim, though some sceptics believe the public may not resist squandering their entire pension on flash cars and holidays.

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Spring Budget to squeeze the middle classes

Fast forward 2 years, and the next Spring budget is due on 16 March 2016. And whilst the UK

PHYS01_Animated_Gif_2_MPUhas been praised for its welfare cuts and apparent austerity, speculation suggests that further cuts are required to contain, and ideally reduce, the national debt.

Rumours are mounting that the Spring Budget may deliver the biggest shock to pensions of all – but this time, not positively.

If Osborne continues to deliver budget surprises, then his most likely weapon of choice will be a reduction on the tax relief currently offered on UK pensions. The suggestion is that lower rate taxpayers won’t be affected as they’ll still receive a 20% top up on all their pension contributions. This equates to a £100 contribution being grossed up to £125.

Instead it’s the, already squeezed, middle classes who will be hit hardest. Currently, for every £100 a higher rate taxpayer puts into their pension, the Government tops up by 40% or £66. If the chancellor slashes this to a flat 20% for all, then the middle classes will lose £41 for every £100 they currently pay in.

There’s even the extreme option that the budget will cut ALL tax relief on pensions, and instead allow pensioners to take their whole pension-pot, tax free, after the age of 55. Currently they can take their entire pension, but only 25% is tax free. A basic rate tax payer saving £250/month for 25 years would lose out by £40,000 with no tax relief and a higher rate taxpayer £70,000.

How likely is this?

Unfortunately it’s very possible indeed. Firstly, the chancellor has previous form. He’s already attacked pension limits – reducing annual contribution caps to £40k and lifetime allowances to £1 million. So it certainly wouldn’t be the first time he astonishes the markets with his budget announcement.

He’s also under mounting pressure to eliminate the annual deficit (which recently rose to £8.2 billion), by the end of 2019. The UK national debt currently stands at over £1.6 trillion, but worryingly is growing at the rate of £5,170 per second.

With global markets under renewed pressure from ultra low oil prices and floundering Chinese stock markets, it may prove increasingly difficult to raise taxes. The next weapon in his armoury would be cuts to tax relief. The current pension relief costs the Government £34 billion a year, so this would be incredibly effective in an overnight reduction in Government outgoings.

The only hope is that Mr Osborne’s ambitions of becoming prime minister may prevent him from upsetting the core Conservative voters – the middle classes. Any raid on their tax relief could be seen as a huge betrayal to Tory values and ruin any chances he has of taking the helm.

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Alternative Tax Relief?

Naturally if you want to add gold into your pension then the relief you’ll receive on that purchase will reduce in line with the new budget. However, adding gold bullion is just as tax-efficient as buying shares or bonds. If you use funds already within your pension (or sell another asset), then you would have already received the current level of tax relief, so won’t miss out. Rules may differ in the US with a Gold IRA.

Another alternative is to purchase tax-free gold coins outside of your pension. These coins are both VAT exempt and Capital Gains Tax free. Although there’s no tax relief on the purchase, these do offer the same tax efficiency as an ISA, but without the restrictive annual limits of an ISA.

Plus you can sell your tax-free coins any time you wish, unlike pension assets which are ‘locked up’ until the age of 55.

One thing’s for sure, if pension tax relief is reduced in the budget, many savers will start looking at alternative, safer havens for their cash, such as gold investment and property – pushing up the prices in both asset classes.

Insider's Guide to gold and silver

Tax-efficient precious metals

If you’re concerned about these possible changes and the continually evolving pension rules, then you should consider being tax efficient in other ways.

With the global economy and traditional equity markets taking a significant downturn in early 2016, precious metals could provide you with tax-efficient, market protection – but only if purchased correctly.

We are specialists in UK based, tax efficient precious metals. Our 4 main product categories are Silver, Tax free Gold, Pension Gold and Gold Savings – all of which have been specifically designed to maximise tax efficiency.


Pension liberation – how will it affect you?

What are the Pension Liberation changes?

Pension liberation is long overdue. With the average UK pension valued at 72,134 do people really feel as if they have any control over their retirement or how much they have coming to them? The answer has always been a firm no! People view their pensions as Monopoly money with a complete disconnect between the monetary value of their pension and how much they actually get when they retire.

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For example lets take the average pension pot of 72,134. Under the old rules you would have to take out an annuity, which works like a payment plan from the pension provider to the pensioner. This annuity would only provide a monthly income of 240/month which for most doesnt generally allow people to rely on their pension income alone. When the market experiences a significant fall in confidence similar to Oct 2014 whereby people lost up to 10% of their pension value the consequence in real pension terms would have been a loss of 24 per month in annuity income. Being a UK citizen I think people have been more concerned with the weather!

Given that a large percentage of the UK population lives within pension poverty the government is encouraging people to live off their pension as opposed to taking more money off a government who has the highest levels of debt in the world.

So from April 2015 instead of pensioners receiving an annuity, pension liberation will enable them to take 100% of their pension pot as cash.

What do these changes mean for you?

This belated pension liberation allows pensioners to take control of their own pension and as such pensioners now serve as custodians of their own wealth as opposed to relying on the nanny state for pocket money. With every story theres another side and in this case there is a risk that people may abuse these new rules and squander their pension, leaving them reliant on the government to help them subsist. I would argue that these potential blunders shouldnt take away the right to manage ones own retirement. In any case, as individuals dont we care more about our own retirement than a partisan government that can only last for 8 years?

Would you like to add gold bullion to your pension? Learn how by downloading our FREE Insiders Guide to gold investment here

These new changes mean that people will have more to gain but also a lot more to lose. People have more to stake with their pension and the implications are that the general public should take far more of an active role in managing their pension.

If we remember under the old rules the 10% drop in equities during October 2014 saw people lose 24 per month. Now under the new pension liberation rules people would have lost 7,213 in a day which serves a much harsher blow. The new rules invoke a bitter sweet effect; on the one hand people are delighted that they can now receive 100% of something theyve been saving up for. On the other hand the old rules didnt encourage people to protect or manage their pensions as the implications werent severe/motivating enough. This leaves people looking at past performance with regret and future threats to their pension with worry and fear

What are the threats?

– Terror threats have negatively influenced the value of pensions by up to 10%
– Greeces new elected Syriza party potentially results in alleviating its debt responsibilities thereby exposing the UK and the rest of Europe to more unpaid debt and therefore weaker currency
– Greece leaving the Euro as a result of their latest election may encourage other member states to follow suit and thereby leave the Euro with even more debt for even less member states. The risk here is a possible Euro crash which has significant implications for every market in the world
– The falling oil price has dragged down the value of equities significantly. The consequence is political instability in Russia and a crimping of their investment in UK property and corporations
– A general election resulting in a hung parliament could result in a weak coalition government giving business leaders a weak economic appetite
– All of these threats remove confidence from the market which discourages people to invest in paper assets thereby affecting liquidity and values. If several of these threats combine and escalate, it lays a rocky path for investments in 2015.

How can gold help protect your pension?

Its a well-known fact that in times of economic, political or fiscal uncertainty physical gold tends to increase in value. This ongoing trend has witnessed a 20% increase in the gold price over the last 3 months as the markets appetite for portfolio insurance has developed with the growing list of pressures that threaten it.

The relevance of using gold to protect ones portfolio and the impending threat of peoples pensions influences people to invest and thereby protect their pension or self-invested personal pensions (SIPP) with physical gold bars. By owning gold bars within your SIPP you are able to remove exposure from many of the threats and risks that eat away at your pension. With a SIPP one can continue to have exposure to riskier assets whilst hedging themselves with gold.

In order to get the full benefit of the new rules people are now more inclined to take an active role in ensuring that they can get 100% of a well-protected pension as opposed to a 100% of a pension thats lost 50% of its value.


A rocky path ahead for investments in 2015

Investments in 2015

It seems like quite a while ago now since the financial markets offered some stability. With the turn of the new year, the hope is that the coming 12 months will offer a fresh start for investments in 2015. Unfortunately it seems the greenshoots of UK recovery experienced last year may prove to be the calm before the storm. Dramatic oil price falls, terror atrocities and the Swiss Franc decoupling from the Euro have already occurred in the first weeks of the year. With the possibility of a hung parliament in May, it seems that 2015 will be a very rocky year indeed for the investment world.

April will mark the start of pension freedom whereby 100% of a pension can be taken rather than being forced to purchase an annuity. Therefore falls in the value of your pension fund just won’t mean the difference of a few pounds a month to your annuity income. It could lead to a fall of thousands, or tens of thousands in the pension cash you hope to get your hands on. So it’s now more relevant to hedge against market turmoil than ever due to a far deeper impact on your personal finances.

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Hedging strategy

Such macro economic mayhem requires portfolio diversification to protect its value from

PHYS01_Animated_Gif_2_MPUdramatic falls. The scale of the falls we’ve seen in the oil price and Sterling suggest their impact on investment values could vast. This volatility will doubtless cause losses unless pensions and investments are spread amongst the various asset classes, with physical gold playing a major role in that protection. No-one has a crystal ball to predict accurately how any asset class will perform in a given period. The current market edginess makes this nigh on impossible. If we look at the performance of the major asset classes over the past 10 years, gold has been the top performer in 4 of those years and second best in another 2. Last year saw a steady 5.89% return, but this year’s market events could lay the foundation for another gold bull run.

Falling Sterling and inflation

In Sterling terms, gold is up more than 12% in the first 3 weeks of 2015. Part of this is due to its qualities as a safe haven, protecting from the losses we’ve seen in equities and global terror events. However, the price is also being driven by a depreciating Sterling. The domestic currency has lost ground with almost all major currencies except the Euro which seems to be holding up the white flag. This is in part due to super low inflation and the acknowledgement that interest rates not only don’t need to increase, but any hike would damage our fragile recovery. Analysts suspect that rates will stay at record lows for the next 18 months at least. This is great news if you’re looking for a loan with record low interest rates. However, for the investments in 2015 it means deposit rates are near zero. With the General Election in May and no one party pushing ahead in the polls, the possibility of a hung parliament will exert further pressure on Sterling.

For those seeking protection from a weak currency, gold investment not only diversifies away from holding all your assets in Sterling, but also directly benefits from a falling currency value.

European disintegration

By far the weakest region is Europe. It has lagged well behind the UK and US in recovering from the credit squeeze of recent years as it looks to simply survive. The worst affected countries like Greece, Spain and Portugal have suffered hardship not seen in generations with record unemployment figures. So far the stronger countries like Germany have stuck by the weaker ones in the hope of somehow coming through the storm with the Euro intact. However, 2015 could well see the entire region finally explode under the pressure. Already the Swiss have shocked markets by losing faith in the Euro, decoupling from its own currency. As a major pillar of Euro strength, the Swiss Franc being pulled away could well lead to the entire building crashing down. Certainly with the Swiss turning their back, there will be many Germans also tempted to go it alone. Not a great prospect for investments in 2015.

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Speculation is mounting that Greek elections this coming weekend could see them leave the Euro and consequently tear up its austerity agreement. Greece’s promise to pay back loans through squeezing the country of its finances has been met with huge resistance from the public who suffer continued hardship day to day. Such a move would cause losses world-wide for those exposed to Greece and its banking system. Rumours abound that further Quantitative Easing is being prepared for the Euro in the wake of such events, which would further contribute to its demise in global perception.

But what do Europe’s woes mean for our investments? Firstly, UK investors are suffering from huge falls in their stock and bond values which have elements invested into Europe. In today’s globalised markets there is always a huge impact globally if any particular region crumbles.

As our largest export market, we will also experience continued drops in demand for our products and services from Europe. Not only will European consumers have less disposable income but their weaker currency will also mean that our exports become expensive.

Hold some physical gold in your pension

It seems then that 2015 could provide Gold’s perfect storm

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so it makes sense to hold some tax free gold coins to diversify away from Sterling and receive better returns than deposit rates. Gold has outperformed inflation in 8 of the past 10 years, better than any other asset class and could again be one of the winning investments in 2015.

With pension freedom arriving this year, it also makes sense to allocate some of your pension pot to physical gold bullion. That way any market volatility will be ironed out by gold’s safe haven status, meaning protection for your pension value and predictability for the year ahead.


3 ways that Budget 2014 affects my wealth

Budget 2014 and your investments

Chancellor Osborne’s budget 2014 promises to reward those who work hard and save hard in what is deemed a bold political budget. But looking through the detail, what are the most important changes that will affect our savings and investments – and how does this relate to gold.

1. ISA allowance increased

Cash and Shares ISAs have been merged into one overall ISA allowance making annual limits less complicated. Most importantly, the annual tax free allowance has almost doubled to £15,000.

This is great news for investors. It’s amazing how many people overlook the importance of being tax efficient in their investments. They don’t realise that they can invest in the same equity fund through an ISA as they can direct – except that any growth within the ISA is tax free. While I’m sure that some are ignorant to this fact, others are simply apathetic. But in this day and age, every penny saved in tax, helps. Therefore, when assessing your finances, one of the first areas to look at is filling your annual ISA allowance, whether it’s with cash, equities or a mix.

How would your family’s wealth be affected by a market downturn? Take our FREE test here to find out


If you invest into certain UK gold coins, any growth is tax free due

Insider's Guide to gold and silverto their status as legal tender in the UK. This means that they can be seen as an alternative tax free shelter to an ISA. Certainly, if you’re able to fill the new £15,000 annual ISA limit but still have funds to put to work, then it makes sense to continue the tax efficient theme. Due to gold’s safe haven hedging properties, there’s also a strong argument for owning some Tax free gold coins alongside your ISA, even if you don’t fill the entire £15,000 allowance.

2. Abolition of 10% savers tax rate

Not all the budget 2014 measures provide tax relief. From 6 April 2015, savers will no longer be able to claim 10% of the tax back on their savings accounts. This is a shame because savers have already been hit hard by low interest rates over the past few years. To be taxed the full 20% on that interest means that any returns will fall well below inflation – essentially devaluing your money’s purchasing power.


The very nature of savings is to prudently put money to one side for a rainy day while maintaining the purchasing power of that cash. Gold Savings is a way of putting aside a set amount of savings per month and purchasing physical gold. Gold has historically more than kept pace with inflation, essentially providing a secure store of wealth. The bonus with the Gold Savings scheme is that the gold is tax free, so any growth is exempt from the 20% tax charge applied to regular savings.

It’s still worth keeping some savings in cash, but gold provides a far more tax efficient way of saving.

3. No need to buy an annuity with your pension pot

By far the most exciting policy in the budget is the change from next April, enabling anyone aged 55 or over with a pension fund to take the entire pension pot as cash. Previously, law limited the drawdown to only 25% of the total value, with the remainder being forced to purchase an annuity.

Annuities, or contracts to pay you an income, have notoriously fallen in value over recent years. This means that even substantial pension funds were only able to provide very modest incomes in retirement. It was the single worst element of the UK pension system. Now, you will be able to have total control and flexibility over your money to re-invest, buy property, or spend. The first 25% is completely tax free with the remainder attracting tax at your underlying rate.



Physical Gold bars are the only precious metal permissible within a UK Self Invested Personal Pension (SIPP). The benefits of owning Pension Gold within your SIPP is that it can smooth out any volatility in the markets, providing growth and protection from market events. This means that the value of your pension pot is more predictable as owning gold will hedge possible losses in traditional paper assets. We expect the loosening of the annuity requirements will lead to a surge in pension  investment, consequently pushing the gold price up.

So I must agree that overall, budget 2014 has been one for the hard working, proactive amongst us. It’s certainly worth reassessing your personal finances to ensure that you capitalise on any new tax breaks which you may be entitled to.


How can IFAs introduce tax free gold investments to retail customers

Need to diversify

With the traditional asset classes falling in value over the past couple of years, conversations about alternative assets have come more into focus.  With hindsight most investors wish they’d had a portfolio hedge in place, a safe haven product, an asset that has returned on average 25% per year, even in the current economic climate.

Gold continues to dominate headlines and provide astounding returns.  Now even the most unsophisticated investor is aware of gold as an asset class, and has read about its benefits as a crisis hedge, inflation protection, and diversification tool.  But few are sure how to invest in it, and even the IFA community may not be aware of some of the tax free methods of investing into the physical metal itself.

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Pension Gold

One of the most obvious tax free gold investments pension gold. Gold bullion is the only precious metal which qualifies for Self Invested Personal Pensions (SIPPs).  There was so much media attention around A-day regarding property that Pension Gold seemed to slip under the radar. The consequence is that a few years on, while many SIPPs offer property products, few offer gold bullion. The fact that investors actually buy gold bars, rather than a paper asset, provides huge comfort that there is no credit exposure whatsoever.  We offer bars denominated in 1oz or 100g sizes to provide exceptional liquidity and store them in a licensed depository where it is fully insured by Lloyds of London. Like any other SIPP qualifying asset, gold bullion receives up to 40% discount through tax relief, and enjoys the usual sheltering from Capital Gains Tax.

Insider's Guide to gold and silverPension gold can be particularly appropriate for savers entering the final phase before retirement. The current economic downturn, and subsequent plunge in pension values, has demonstrated the exposure and lack of balance many pension investors have. When these nasty shocks occur shortly before retirement, there’s usually little time to recover, and many feel forced to delay their retirement in the hope of recovering portfolio values. An allocation in physical gold acts as a hedge against such events.

Pension gold can also play a vital role in a younger, more aggressive pension portfolio. It provides balance when teamed with property structures, high yield and emerging market assets.

Tax free gold coins

Other investors are buying physical gold outside of their pension.  They are choosing to use idle bank deposit money to invest in completely tax free gold coins.  Many customers are fed up with low bank returns which are not only taxed but also exposes them to the bank failing if they have over £50,000.  All investment gold is VAT exempt, and UK bullion coins are Capital Gains Tax free too as they’re classed as legal tender.   The most popular tax-free gold coins are the 1oz Britannia or the smaller Sovereign coin. Both provide a fantastic heirloom, as well as wise investment, and some customers opt for older Sovereigns to enjoy the added historical value.  All of the Tax free gold coins trade at a premium to the same size gold bar as they not only consist of the intrinsic gold value, but also a value linked to its design, rarity, and demand. Customers obviously maintain their premium over bullion bars when they come to sell.

If customers are making a modest investment, and therefore unlikely to breach Capital Gains thresholds, then they may opt for a well known foreign coin such as the Krugerrand. These are currently trading 2-3% cheaper than the equivalent Britannia.

Investors can actually take delivery of this gold and store it in a private safe or their bank’s safe deposit facilities, or opt to use the gold dealer’s storage facilities.  The coins are a simple, understandable, tangible investment, which provide a great contrast to the many complicated structured products on the market.

Regular Tax free gold investments

For those without lump sums to invest there are also ‘drip feeding’ accounts such as our Gold Savings. This provides an alternative regular savings scheme. Instead of saving every month or quarter in paper money, a Standing Order is set up and tax free gold coins delivered on a regular basis so clients gradually build a golden nest egg. With the huge threat of inflation with record low interest rates and Quantitative Easing, gold seems to provide great wealth preservation.

We have an extensive network of IFAs who place their gold products into the UK retail market through our Gold Advisers Program.  There is a huge role to play by the IFA community, to make customers aware of the various gold products on offer and that diversification is key to securing your customers’ wealth. Gold provides a unique balance due to its low correlation with other assets and due to its nature as a physical asset versus the traditional paper assets most people own.


Many of your client base may ask whether they’ve missed the boat with gold investment. While it is true that gold is at all time highs, it is also still a great time to start investing.  Many believe the gold price is at a tipping point and will provide 2-300% returns over the next 3-5 years.

Mining supply will be flat to negative over the next 10 years.

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That is the timescale it takes from discovery to mining, so it provides transparency for supply. Secondary supply is plummeting as the usual main central bank sellers have become net buyers for the first time ever. Their holdings are up 40% this year.

Demand for investment continues to rise as retail awareness increases and significantly pension and hedge funds have sited physical gold as an integral part of their ongoing portfolios. Oil producing nations look to preserve wealth with gold rather than dollars, and industrial demand will undoubtedly increase when the world economy does eventually pull out of the mire, due to the metal’s use in electronics.

The economic environment also remains very supportive of further price gains. Most will agree that another few years of financial pain remains with record unemployment and record Sovereign debt levels.  The Dollar looks like losing its status as the world’s reserve currency, as the BRIC economies suggest benchmarking against a basket of currencies instead.  As a safe haven asset, gold will continue to shine.

When we do emerge from recession and start to grow, there is one final phantom waiting around the corner – inflation.  With global interest rates near to zero, huge stimulus packages, and the UK’s Quantitative Easing program, the likelihood of high inflation is very apparent.  With the value paper money set to be eroded, there is only one true store of wealth – physical gold.


Gold investment still not part of the average portfolio

Over the past few months we’ve seen the price of gold head higher. Just recently many investment analysts have predicted the price to continue its meteoric rise with $1,500/oz sited by year end and $2,000/oz within the next 18 months. Over the past decade gold has returned an average of over 25% a year. Yet, still only a small percentage of investors own physical gold, especially in the UK.

Total net investment in gold from start of 2010 through to July 31st was $2.7 billion. Yet, in the course of the same period, investors poured $22 billion into emerging markets mutual funds and $155 billion into bond funds.  In comparison to these numbers, the total amount invested into gold is negligible.

Portfolio mindset

So why are so many people ignoring the asset as part of their portfolio?

I certainly don’t think it’s due to a lack of awareness of gold. The press coverage over the past few years has been phenomenal. Most people are now aware that gold can be bought as an investment, and that it performs well as a safe haven asset. So surely that’s half the job done?

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The main barrier preventing the average investor buying gold is mindset.  Many modest

Insider's Guide to gold and silverinvestors and savers still perceive gold as being elitist and out of their reach.  They don’t realise that you can buy a Sovereign coin for just over £200 or tiny gold bars for £50 or less!  Certainly the US retail market is at least 10 years ahead of the UK market in terms of the average person owning some gold as part of their portfolio. It’s only a matter of time before we catch up. Only a small fraction of UK investors have considered alternative assets at all. Most still stick to traditional paper assets such as stocks, bonds and cash. However, with huge losses from these assets over the past few years more people are now opening their eyes to the world of alternatives, including gold. More are now realising that a true balanced portfolio needs to include a wider range of assets.  Traditional currencies such as the Dollar, Sterling and the Euro are now threatened, so we are gradually seeing more savers using gold as a store of wealth rather than leaving all their liquid assets in a Sterling savings account.  But these are still in the minority, and most savers to still accept ISAs and savings accounts as the only options.

How to buy gold

The next mental block is a lack of knowledge in what to buy, how to buy gold, and where from.  While gold has been around for centuries, it remains a ‘new’ asset class to many. The first question novice investors ask us is should they buy gold coins, bars or mining stocks? The options are endless and many feel they don’t know who to ask to get the answers.

While awareness of gold in general is high, many of the people we speak to aren’t aware that certain coins are totally tax free in the UK, or that you can get 40% discount off the price of gold bars as part of a UK pension.  That’s not a surprise when so few Independent Financial Advisers (IFAs) discuss alternative assets with their clients. Many of the IFAs themselves weren’t aware that gold bullion could be bought with a pension.  This is part of the reason why we started the Gold Adviser’s Program.

When the pension parameters changed in the UK to allow some alternative investments into Self Invested Personal pensions (SIPPs), most of the press focus was on property. At the time buy-to-let properties were the thing to be in, with many modest investors becoming landlords. When residential property was widely touted to be included as permissible SIPP assets press coverage could talk of nothing else. This would mean investors could essentially buy a £100,000 flat at £60,000 once tax relief is factored in. At the last minute the Government performed a U-turn and only allowed commercial property with a SIPP. However by this stage gold had slipped under the press radar as the only commodity permitted into a SIPP. So pension gold really hasn’t been promoted in the UK. When our customers are made aware of the possibility they love the idea.


New processes

It’s also true that the average investor doesn’t know the buying process. How do I pay? Where do I store the gold? How do I know it’s real. These are some of the most common questions we receive. If you have the support and expertise of a good gold dealer then these sort of questions are easily overcome.  The buying process is as simple for gold as buying anything and once customers buy once they realise there is nothing radical about the investment process.  Finally, it’s human nature that investors want to buy at the lowest price and sell at the highest. This is the main investment strategy afterall. So many are put off that gold is at all time highs. They feel they have missed the boat and are unsure of the best timing to add gold to their portfolio. As I mentioned at the beginning most experts feel gold has a long way to run yet and starting a relationship with a reputable gold dealer today will help you select the best buying opportunities and get the ball rolling with the new world of physical gold.

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