Gold has long been regarded as the ultimate store of value. Throughout history, countless cultures have been captivated by its beauty and allure, ensuring an evolving global demand for the precious metal. Combine this demand with scarcity of supply, and gold’s status as a valuable asset is both steadfast and undeniable. 

 

 

However, the many benefits of owning gold may have yet to be widely realised, particularly among younger generations. Experts at Sharps Pixley, London’s trusted gold bullion supplier, investigate why investing in gold can be a smart choice for securing your financial future.

 
Long-Term Wealth Security
 

Investing in gold is a great choice because, unlike stocks and shares, it holds its own value and isn’t reliant on a promise to pay. During economic downturns or periods of political instability, such as the most recent UK election, gold often increases in value, earning it a reputation as a safe-haven asset. Gold has delivered positive returns in five of the last seven recessions since 1973. 

 
Tax Benefits of Owning Gold 
 

Investing in gold is not only practical; it can result in tax efficiency: 

  1. Capital Gains Tax (CGT) Exemption – Certain gold and silver coins minted by the Royal Mint are classed as legal tender in the UK and are exempt from Capital Gains Tax (CGT) when sold at a profit. This includes gold and silver Britannias, Sovereigns and collectable ranges such as the Queen’s Beasts. This stands out from other types of investment (art, shares, additional properties, etc.), where the profits on the sale are subject to CGT. Thus, Royal Mint bullion coins are a very popular choice among UK investors. 
  2. Inheritance Tax (IHT) Planning – Gold can be used in inheritance tax planning. By holding physical gold, which can be passed on to heirs, investors might reduce the overall value of their estate to lower the IHT burden. Although gold itself is subject to IHT if it forms part of the estate, careful planning and using trusts or gifting strategies could help manage the tax implications.
  3. VAT Exemption on Investment Gold – Investment-grade gold is exempt from Value Added Tax (VAT). Investment gold is defined as either gold bars of a purity not less than 99.5% or a gold coin minted after 1800 that is at least 90% pure gold.  
  4. Pension Planning – Gold can be included in certain pension schemes and offers tax advantages, such as tax relief on contributions, tax-free growth, and a tax-free lump sum upon retirement. Including gold in a pension or portfolio can be a way to diversify and protect against market volatility while also benefiting from tax efficiencies.
  5. Estate Planning – Gold can be gifted or easily transferred as a physical asset in estate planning strategies to help manage the inheritance tax threshold and, depending on how the gold is structured within an estate plan, offer advantages in terms of wealth transfer.

Diversify Your Investment Portfolio

Investing in gold can help diversify your investment portfolio. Unlike stocks, which can be highly volatile during times of geopolitical instability or economic recession, gold often performs well in such circumstances. At the time of writing, geopolitical instability and a gloomy economic outlook are causing world central banks to purchase gold at record rates. Purchase rates totalled a record high of 1,082 tonnes in 2022 and 1,037 tonnes in 2023 (the second-highest annual purchase in history), resulting in all-time high gold prices.  

According to the 2024 Central Bank Gold Reserves (CBGR) survey conducted by the World Gold Council in April 2024, 29% of central banks respondents plan to further increase their gold reserves in the next twelve months. To draw on an example from a little further back in history, gold prices surged during the 2008-2009 financial crisis while stock markets plummeted. These examples serve to show that by including gold in your portfolio, you can reduce overall volatility and protect against downturns in other assets.

 
Gold Is a Trustworthy Tangible Asset
 

When you buy bars of gold or gold coins and store them away securely, years later, when you open the vault, you will still have bars of gold or gold coins. Unlike stocks and shares, gold does not pay dividends, but it retains its value. Stocks and shares can fluctuate rapidly and take years to recover –  they are a higher-risk investment. 

Conversely to digital investments, gold doesn’t rely on technology and won’t disappear in the case of a digital system collapse. Gold doesn’t rust or fade and cannot be easily faked, making it one of the safest long-term investments. In an increasingly digital world, the tangible nature of gold provides a reassuring sense of security.

 
Protect Against Deflation
 

Gold is also a reliable safeguard during periods of deflation when the value of paper money can drop significantly. Unlike currency, which can be devalued, gold retains its value, helping to preserve your purchasing power. During the Great Depression of the 1930s, for example, many investors turned to gold as a safer alternative to the stock market, which had collapsed.

 
Gold is Internationally Recognised
 

Gold is a scarce and finite commodity, which are factors that increase its global liquidity. Today, the world’s central banks own the largest gold reserves, accumulating more at a rate not seen for over 50 years. In fact, according to a 2024 World Gold Council survey, central bank gold reserves have been at their highest since the survey began in 2018. Central banks still continue to seek security in gold, and individual investors looking to protect their assets may benefit from following suit. 

 
Hedge Against Inflation
 

Inflation erodes the value of paper currency, but gold typically rises in value during these periods. By investing in gold, you’re essentially protecting your wealth against inflation and even more extreme situations like hyperinflation or currency collapse. Adding gold to your investment portfolio acts as a form of insurance, safeguarding your other investments during turbulent times.

 
Are You Ready To Take the Next Step Towards Securing Your Wealth?
 

Owning gold offers a range of benefits for those looking to protect and grow their wealth. It provides diversification, serves as a hedge against inflation, and acts as a safe haven during periods of geopolitical uncertainty. Whether the economy is booming or struggling, gold remains a steadfast asset that never loses its shine.

If you’re considering adding gold to your investment portfolio, now is the time to take action. Our team of experts at Sharps Pixley are here to guide you every step of the way and help you invest in gold with confidence. 

For more information, call 0207 871 0532, where our specialist advisors can assist. Alternatively, visit the Sharps Pixley showroom to explore our range, or speak with an investment advisor. Secure your financial future today by investing in the timeless value of gold. 

 

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