UK Bullion Guide

What Gold and Silver Products Do People Buy in the UK?

This page provides a practical overview of the gold and silver products most commonly purchased by UK buyers. It is intended as general educational information, not as investment advice or a recommendation to buy any particular product.

Quick Overview for Beginners

If you are new to buying physical gold or silver, the range of products available can seem overwhelming. In practice, most UK buyers start with a relatively small number of well-established options.

The most common starting points tend to be:

  • For gold: Gold sovereigns, 1oz gold coins (such as Britannias), or small gold bars
  • For silver: 1oz silver coins (such as Silver Britannias), or 1kg silver bars

There is no universally "correct" product to start with. The right choice depends on your circumstances, budget, storage situation, and personal preferences. This page aims to explain the options so you can make an informed decision.

Important: This page is educational only. It does not constitute financial advice, and nothing here should be taken as a recommendation to buy, sell, or hold any particular product.

Most Common Silver Products in the UK

Silver is often seen as a more accessible entry point than gold due to its lower price per ounce. However, there are important UK-specific considerations—particularly around VAT—that affect the real cost of buying silver.

1oz Silver Coins

One-ounce silver coins are among the most popular products for UK buyers. They are easy to store, widely recognised, and can be bought individually or in tubes (typically 20 or 25 coins). Common examples include Silver Britannias, Canadian Maple Leafs, and American Silver Eagles.

Silver Britannias

The Silver Britannia is a particularly common choice among UK buyers. It is minted by The Royal Mint, contains one troy ounce of .999 fine silver, and has a face value of £2 (though its actual value is determined by the silver content). As UK legal tender, Silver Britannias are exempt from Capital Gains Tax (CGT) on any profit when sold—though they are still subject to VAT when purchased.

1kg Silver Bars

For those buying larger quantities, 1kg silver bars (approximately 32.15 troy ounces) typically offer a lower premium per ounce compared to coins. However, they are less divisible—you cannot sell half a bar—and may be slightly less liquid than well-known coins.

VAT on Silver in the UK

Unlike investment gold, silver is subject to 20% VAT in the UK. This applies to coins, bars, and rounds regardless of purity. The VAT is charged at the point of sale and cannot be reclaimed by private individuals. This means that when you buy silver, you are paying approximately 20% more than the spot price before any dealer premium is added.

This VAT cost is a significant factor in silver investing. It effectively means you need the silver price to rise by at least 20% just to break even (before accounting for premiums and spreads). For more detail on current silver pricing, see the Silver Price page.

Most Common Gold Products in the UK

Gold has a higher entry cost than silver, but it benefits from VAT exemption in the UK when it meets certain criteria. This makes the total cost of ownership more straightforward to calculate.

Gold Sovereigns

The gold sovereign is one of the most popular gold coins in the UK. It contains approximately 0.2354 troy ounces of gold (7.32g) at .9167 purity (22 carat). Sovereigns have a long history, are widely recognised, and as UK legal tender, they are exempt from Capital Gains Tax on any profit when sold. They are often chosen by buyers who want smaller, more divisible units of gold.

1oz Gold Coins (e.g., Gold Britannia)

One-ounce gold coins, such as the Gold Britannia, contain exactly one troy ounce of gold at .9999 purity (24 carat). They are a standard unit in the bullion market, making them easy to buy, sell, and value. Like sovereigns, Gold Britannias are CGT-exempt as UK legal tender.

Small Gold Bars

Gold bars are available in sizes from 1g upwards. Smaller bars (1g, 5g, 10g) tend to carry higher premiums relative to their gold content, while larger bars (1oz, 100g, 1kg) typically have lower premiums per gram. Bars from LBMA-accredited refiners are generally preferred for resale purposes.

VAT Exemption for Investment Gold

In the UK, "investment gold" is exempt from VAT. To qualify, gold must meet specific criteria:

  • Gold bars must be of a purity of at least 995 parts per thousand
  • Gold coins must be of a purity of at least 900 parts per thousand, minted after 1800, and be (or have been) legal tender in their country of origin

Most standard bullion coins (Britannias, Sovereigns, Krugerrands, etc.) and investment-grade bars qualify for this exemption. For more detail on current gold pricing, see the Gold Price page.

Coins vs Bars: Practical Considerations

Both coins and bars have their place, and the "better" choice depends on your priorities. Here are some practical factors to consider:

Coins

  • Recognition: Well-known coins (Britannias, Sovereigns, Maple Leafs) are instantly recognisable and easy to verify
  • Divisibility: Easier to sell small quantities—you can sell one coin at a time
  • CGT exemption: UK legal tender coins (Britannias, Sovereigns) are exempt from Capital Gains Tax
  • Premiums: Generally carry higher premiums than bars of equivalent weight
  • Storage: Coins in tubes or capsules can be slightly bulkier than stacked bars

Bars

  • Lower premiums: Bars typically have lower manufacturing costs, resulting in smaller premiums over spot
  • Storage efficiency: Bars stack neatly and may be more space-efficient for larger holdings
  • Less divisible: You cannot sell part of a bar, which may limit flexibility
  • Verification: Bars from less well-known mints may require more effort to verify when selling
  • CGT: Gold bars are not CGT-exempt (unlike UK legal tender coins)

Many buyers hold a combination of both coins and bars, choosing coins for flexibility and bars for cost efficiency. There is no single correct approach. For a more detailed comparison, see our guide to gold coins vs bars.

Premiums, Spreads, and What You Actually Pay

When buying physical gold or silver, you will pay more than the "spot price" quoted on financial markets. Understanding this difference is important for setting realistic expectations.

Spot Price vs Retail Price

The spot price is the current market price for immediate delivery of gold or silver in wholesale quantities (typically 400oz gold bars or 1000oz silver bars traded between institutions). It is the baseline price you see quoted on financial websites.

The retail price you pay includes additional costs:

  • Fabrication: The cost of minting coins or refining and casting bars
  • Dealer margin: The dealer's operating costs and profit
  • Distribution: Shipping, handling, and insurance to get the product to you
  • VAT: For silver, this adds 20% to the price

The difference between spot and retail is often called the "premium." Premiums vary by product, dealer, and market conditions.

Why Smaller Items Have Higher Premiums

As a general rule, smaller items carry higher premiums (as a percentage of their metal value) than larger items. This is because the manufacturing cost for a 1g gold bar is not dramatically less than for a 10g bar, but the gold content is ten times smaller.

For example, a 1g gold bar might carry a premium of 15-25% over spot, while a 1oz bar might carry a premium of 3-6%. The same principle applies to silver coins versus silver bars.

The Spread: Buying vs Selling

Dealers typically buy back bullion at less than they sell it for. The difference is called the "spread." This means that even if the spot price hasn't moved, you may receive less when selling than you paid when buying. The spread varies by product and dealer, but it is a real cost to factor into any purchase.

A Simple Starter Decision Framework

If you are considering buying gold or silver for the first time, here are some questions that may help clarify your thinking. These are not recommendations—just prompts for self-reflection.

  1. 1.
    What is your budget?

    Gold has a higher entry point than silver. A single gold sovereign costs several hundred pounds, while a silver Britannia costs tens of pounds. Your budget may naturally guide you toward one metal or the other.

  2. 2.
    How do you plan to store it?

    Silver is bulkier for its value than gold. £10,000 of silver takes up considerably more space than £10,000 of gold. Consider whether you have secure storage at home, or whether you would need to pay for professional vault storage.

  3. 3.
    How important is liquidity?

    Well-known coins (Britannias, Sovereigns, Maple Leafs) are generally easier to sell than obscure bars. If ease of resale matters to you, recognisability is worth considering.

  4. 4.
    How sensitive are you to VAT?

    Silver carries 20% VAT in the UK; investment gold does not. If the upfront VAT cost concerns you, gold may be more straightforward.

  5. 5.
    Are you collecting or stacking?

    Some buyers are interested in numismatics (coin collecting) and may pay extra for rare dates or designs. Others simply want the most metal for their money ("stacking"). These are different goals that lead to different product choices.

Frequently Asked Questions

Is silver subject to VAT in the UK?

Yes. Silver (coins, bars, and rounds) is subject to 20% VAT in the UK when purchased from UK dealers. This VAT cannot be reclaimed by private individuals. It is a significant cost factor that does not apply to investment gold.

Are gold sovereigns VAT-free?

Yes. Gold sovereigns qualify as "investment gold" under UK tax rules and are exempt from VAT. They are also exempt from Capital Gains Tax (CGT) as UK legal tender, which is an additional benefit not shared by gold bars.

Is it better to buy one large bar or several smaller items?

There is no universal answer. Larger bars typically have lower premiums, giving you more metal for your money. However, smaller items offer more flexibility—you can sell one coin without liquidating your entire holding. Many buyers find a balance that suits their circumstances.

How do I store bullion safely at home?

Common approaches include a home safe (ideally bolted to the floor or wall), a hidden location, or a combination of both. You should also check your home insurance policy—many standard policies have low limits for valuables and may require a rider or separate policy for bullion. Some buyers prefer professional vault storage to avoid home security concerns entirely.

What affects premiums?

Several factors influence premiums: product size (smaller items cost more to manufacture per unit of metal), product type (coins typically carry higher premiums than bars), mint reputation (products from well-known mints may command higher premiums), and market conditions (premiums often rise during periods of high demand or supply disruption).

Do I need to pay Capital Gains Tax on gold or silver?

UK legal tender coins (such as Britannias and Sovereigns) are exempt from CGT. Gold bars and non-UK coins may be subject to CGT if you make a profit above the annual allowance. Silver products are generally subject to CGT on gains. Tax rules can change, and individual circumstances vary—consult a tax professional for advice specific to your situation.

Can I buy gold or silver from a bank in the UK?

Most UK high street banks do not sell physical gold or silver to retail customers. The main channels for buying bullion are specialist online dealers, The Royal Mint's website, or occasionally local coin dealers and jewellers. Some banks may offer gold-related financial products (such as ETFs or certificates), but these are not the same as owning physical metal.

What is the difference between 22 carat and 24 carat gold?

Carat (or karat) refers to gold purity. 24 carat gold is 99.9%+ pure gold. 22 carat gold is 91.67% pure, with the remainder being other metals (typically copper and silver) added for durability. Sovereigns are 22 carat; Britannias are 24 carat. Both qualify as investment gold for VAT purposes. The choice is largely personal preference—22 carat coins are more durable, while 24 carat coins contain slightly more gold per unit weight.

Important Notice

This page is for general educational purposes only. It does not constitute financial, investment, or tax advice. The value of precious metals can go down as well as up. You should conduct your own research and, where appropriate, seek professional advice before making any purchase. Tax treatment depends on individual circumstances and may change in the future.