Gold has been on a tear. Over the last 12 months it has repeatedly set fresh records, pushing above $4,000/oz in early October 2025, propelled by expectations of US rate cuts, persistent geopolitical tensions and a powerful wave of official-sector buying and ETF inflows.
Those drivers matter: lower real rates reduce gold’s opportunity cost, central banks have now clocked a rare multi-year stretch of +1,000-tonne annual purchases, and investor demand via exchange-traded products has swung back to strong net inflows in 2025.
Why the enduring fascination?
Gold’s reputation as a store of value rests on scarcity, deep global liquidity, and its tendency to diversify portfolios during currency stress, inflation spikes or market drawdowns. That’s why central banks keep adding to reserves and why private investors often reach for the metal when uncertainty rises.
What most pensions actually offer
When UK savers look to add “gold” to a pension, the default menu rarely includes bars in a vault.
Mainstream workplace pensions typically give exposure via funds—often mining-equity funds—or, within many traditional SIPPs, via exchange-traded commodities (ETCs/ETFs) that aim to track spot gold. For example, the iShares Physical Gold ETC can be held in a SIPP, providing price exposure through vaulted bullion backing.
The financial regulator’s “standard assets” framework for SIPPs also explicitly recognises exchange-traded commodities and physical gold bullion as permissible holdings (subject to a provider’s own policy).
But beware: “linked to gold” isn’t the same as owning it
Gold-mining funds behave like equities—sensitive to cost inflation, geology, and management decisions—so they can diverge materially from spot prices.
ETCs reduce that business-risk link, but they are debt securities issued by a vehicle and secured against bullion at a custodian; investors have limited recourse to the underlying collateral if something goes wrong. In other words, there is still issuer and custody risk to consider even when bars are allocated.
A further nuance is how gold is held. In the London market, allocated metal gives you title to specific bars, while unallocated metal leaves you with a claim on a pool and credit exposure to the institution.
Most wholesale flows clear unallocated because it’s cheap and liquid, but allocated holdings remove that balance-sheet exposure—an important distinction if you want your pension to own metal outright rather than a claim.
Holding physical gold in a pension: what’s allowed
If you want actual bars within your pension, you need a SIPP (or SSAS) that is set up to hold physical bullion.
The financial regulator added physical gold bullion to the SIPP standard-asset list in 2014, and specialist providers have long facilitated such holdings.
HMRC rules are strict: it must be investment-grade gold—bars or wafers of at least 995 fineness—professionally stored in an approved vault, with no personal use or home storage by the member. Coins, jewellery and other tangible moveable property are generally treated as “taxable property” in pensions and can trigger punitive charges—one reason providers typically restrict physical holdings to compliant bars only.
In practice, this means the only way to hold physical gold inside a pension is through a specialised SIPP that permits non-mainstream assets alongside equities and bonds and that has the operational plumbing—vaulting, insurance, audit and reconciliations—to meet HMRC/FCA requirements.
How to set it up (and who you’ll need)
Two parties must be willing and able to work together:
1. a SIPP provider that accepts physical bullion; and
2. a UK bullion broker/custodian that can sell compliant bars directly to your SIPP trustee and arrange secure third-party storage.
Specialist administrators commonly maintain panels of vetted dealers and will require due-diligence checks before transacting. Some will also work with your preferred LBMA-affiliated dealer if it meets their criteria.
Segregated (“allocated”) vs pooled (“unallocated”) pension gold
Where possible, insist on allocated, segregated storage in the SIPP’s name.
With allocated metal you receive a bar list with serial numbers; you own specific bars and are not an unsecured creditor of the custodian. Unallocated/pooled arrangements are cheaper but substitute a credit claim for title to metal—precisely the exposure many investors are trying to avoid by choosing physical.
Tax: why a SIPP wrapper can beat holding gold personally
Inside a SIPP, contributions usually attract income-tax relief (20% basic-rate added at source, with higher/additional-rate relief claimable via Self Assessment) up to the annual allowance rules; investments then grow free of UK income tax and capital gains tax.
On withdrawal, you can normally take 25% tax-free (subject to the current limits), with the balance taxed as income at your marginal rate. Planning matters here to avoid “emergency code” over-deductions in year one.
For the metal itself, investment-grade gold is generally VAT-exempt in the UK, which is helpful whether you buy personally or via a pension.
Outside a pension, capital-gains treatment depends on form: UK legal-tender coins such as Britannias and Sovereigns are exempt from CGT, whereas bars (and many foreign coins) are not.
In a SIPP, gains are sheltered regardless, which can be especially efficient for higher-rate taxpayers using upfront relief to fund the purchase.
Transferring to a “gold SIPP” (full or partial)
If your current pension doesn’t permit physical bullion, you can transfer to a provider that does—or arrange a partial transfer so only the desired amount moves across, leaving the rest invested conventionally.
Providers publish transfer guidelines and can accept crystallised or uncrystallised funds, but always check exit fees, market-value reductions and any safeguarded benefits before you move.
Most crucially, if you are transferring from a defined-benefit (final salary) scheme or giving up guarantees, the FCA expects you to take regulated advice and to understand the risks of swapping guaranteed income for investment-based benefits. Poorly judged transfers can cause irreversible harm.
Putting it all together
· If you simply want gold exposure inside a typical SIPP, a low-cost physical gold ETC is usually the most straightforward route—just recognise the structural (issuer/custody) risks in exchange for convenience and liquidity.
· If you want actual bars inside your pension, work with a specialist SIPP and a vetted LBMA dealer, ensure bars are investment-grade (≥995) and stored in an approved vault, and opt for allocated/segregated storage to reduce counterparty risk.
· From a tax perspective, the SIPP wrapper offers relief on contributions and CGT-free growth, while VAT rules on investment gold are favourable either way. Outside pensions, UK legal-tender coins can be CGT-efficient, but bars typically are not.
Holding physical gold in a pension can be a sensible diversifier—particularly after a year in which macro risks and central-bank demand have dominated the tape—but it’s not “set and forget.”
Storage, insurance, dealing spreads and SIPP fees all eat into returns, the gold price can be volatile, and pension rules can change. Before transferring or buying, speak to a regulated adviser to make sure you’re not inadvertently giving up valuable benefits and that a gold SIPP fits your risk tolerance and retirement plan.
Risk warning:
Stock market linked investments and any income from them, can fall as well as rise and is not guaranteed. Any figures quoted are for illustrative purposes and should not be taken as a forecast or guarantee. Past performance should not be seen as an indication of future returns and clients may get back less than they have invested.
