Is it worth investing in gold in the UK?

Investing in gold in the UK can be worthwhile — it has several advantages, but also some drawbacks. Whether it’s right for you depends a lot on your financial goals, your time‐horizon, and how much risk/volatility you’re willing to tolerate. I’ll walk through the pros & cons, key things to watch, and some tax rules here so you can decide more clearly. If you want, I can also run a quick analysis tailored to your situation (risk tolerance, amount, etc.).

Pros of investing in gold (UK)

1. Hedge against inflation and currency risk
   Gold often retains value (or even gains) when inflation is high or when the currency is under pressure. If interest rates are low, or the pound weakens, gold can act as a safe haven. Morningstar+2PR Newswire+2

2. Diversification
   As it tends not to move exactly in step with equities or bonds, having some gold in your portfolio can help reduce overall volatility. Morningstar+1

3. Recent price performance
   Gold has been hitting record highs in pound sterling. For example, in recent periods gold’s price rose sharply in GBP. That means recent gains for those who already held gold. PR Newswire+2IFA Magazine+2

4. Favourable tax treatment in certain forms

   • Some gold coins minted by The Royal Mint, such as Britannias and Sovereigns, are legal tender and are exempt from Capital Gains Tax (CGT). Royal Mint+2GOLD AVENUE+2

   • Investment gold (typically bars or coins meeting certain purity standards) is VAT‐exempt. GOV.UK+2Forbes+2

5. Liquidity
   Physical gold coins and bars can often be sold reasonably quickly. Also, one can invest via gold ETFs, trusts, or gold mining stocks if you prefer not to handle the physical metal. Morningstar+2The Motley Fool+2

6. Psychological / “safe‐haven” value
   In uncertain geopolitical or economic times, many investors are drawn to gold as a store of value. That effect tends to boost demand (and sometimes price). Royal Mint+1

Cons / risks of investing in gold

1. No yield or income
   Gold doesn’t generate interest, dividends or rent. The return comes entirely from price appreciation. If other investments are yielding income, they may outperform over time. Next Day Bullion+1

2. Volatility and price risk
   Even though gold is “safe” in some senses, its price can swing quite a bit, especially in the short‐term (due to currency moves, global risk sentiment, central bank actions, etc.). Next Day Bullion+1

3. Storage, insurance, transaction costs
   If you own physical gold, you must think about securely storing it (vaults, safe deposit boxes), insuring it, transport costs, and also the premium/markup you pay over “spot” price when buying. Next Day Bullion+1

4. Taxes (in some cases) + other regulatory/legal considerations

   • As noted, not all gold is CGT‐exempt. Coins and bars that are not legal tender in the UK may incur CGT if your total gains (across assets) go above the annual allowance. Buy Gold Online+2Royal Mint+2

   • Inheritance tax still applies: gold held in your estate counts. Royal Mint+1

5. Opportunity cost
   Money tied up in gold can’t be used elsewhere (e.g. equities, real estate, growing businesses) which might give higher returns, especially in growth phases of the economy.

UK‐specific tax and cost points to watch

• VAT: Investment gold (pure gold, certain standards) is VAT‐exempt. But jewellery or items not meeting the “investment gold” definition may be subject to VAT. GOV.UK+1

• CGT:
    • Coins from The Royal Mint (Britannia, Sovereign coins) are legal tender, so they are exempt from CGT. Royal Mint+1
    • Other coins or bars generally are not exempt: gains above the CGT allowance are taxed. Buy Gold Online+1
    • The CGT allowance (for other assets) is something to check each year. It has changed. For example, for 2024/25 it’s about £3,000. GOLD AVENUE+1

• Purity and standards: You’ll want gold of high purity (e.g. 99.9%) and from a reputable source, to ensure liquidity and lower risk of loss on resale. Forbes+1

So, is it “worth it”?

Here’s what tends to be true, based on what current evidence shows (as of 2025):

• Gold has already seen strong price gains in UK terms over recent years. Many UK investors are using it as a hedge and to diversify in times of higher inflation, geopolitical risk, and uncertainty. PR Newswire+2Royal Mint+2

• If your aim is capital preservation (keeping value over time), or insurance in your portfolio, then a modest allocation to gold (say 5-10%) might make sense.

• If you are looking for growth or income, or you need money in the short term, gold is less attractive than equities, property, or other income‐producing assets, especially after factoring costs.