Gold Britannias or Gold Bars - A Comparison
Since 1987 Britannia has featured on a gold bullion coin minted in the UK by The Royal Mint. The gold Britannia is a competitor to the very popular 1-ounce gold Krugerrand which is minted in South Africa by the Rand Refinery. The Britannia comes in several sizes including the very popular 1 ounce, half ounce, quarter ounce and tenth ounce as well as three, four, and five-piece coin sets. In this blog, we will only be comparing the one-ounce coin as a bullion investment coin rather than a collectable piece. As such as pre-owned gold Britannias are the best priced options.
A one-ounce gold Britannia is a perfect size and is a good trade-off between compact storage and liquidity. As gold is very dense you can store a large amount of value in a small space and your immediate question might be "why not buy a 1kg gold bar instead of 32 one-ounce gold Britannias?" It should follow that a larger bar at a lower premium would be the better investment. However, it does also depend on how easy it is to sell when you are ready. Say you have bought a one kilo gold bar for £48,444.61 we would currently buy it back at £42,942, and if you were to buy a one ounce secondary market gold Britannia you would pay from £1,526.10 and could expect to get £1,469.22.
From the prices quoted above, you can see our buy back rates are better for gold coins than gold bars. This is because we have more of a market for gold coins as they are more popular and, in our opinion, a much better investment choice. Not only are you getting better rates on gold coins you also don’t have to cash in £42,942 in one go. You can exchange fractional amounts in the order of one ounce which is £1,469.22. Therefore, the flexibility offered when buying gold coins is far better than a 1kg bar, and your day to day servicing of debt and purchases is easier trading coins. The next sensible question would be "why not buy a smaller gold bar?". Well a 1kg gold bar currently has a premium of 1.5%, which is certainly competition against the Britannia which starts from 2.8%. However, as soon as you look at smaller bars the premiums shoot up! Take a look at this price comparison table for different bars:
|1 Kg Gold Bar - Our Choice Pre-Owned||1.5%||£48,444.61|
|100g Gold Bar Metalor Cast - Pre-Owned||3%||£4,914.39|
|1 oz Gold Bar Metalor Wafer - New||4.5%||£1,550.84|
|10g Gold Bar Metalor Wafer - New||11.15%||£530.33|
The gold Britannia coin is also Capital Gains Tax exempt as each coin has a face value and is legal tender. Currently the CGT limit is £11,300, so if you have large amounts of money to invest and expect to realise a profit exceeding the threshold, we would highly recommend gold Britannia coins over gold bars. The full profit realised (above the threshold) on gold bars will be subject to Capital Gains Tax. So, immediately you are losing money! In both cases, gold Britannias and gold bars are exempt from VAT but with Britannias you get double tax relief!
Aside from the practicalities, price and tax status of the gold Britannia coin they also come in a variety of designs which, in our opinion, makes them a much more interesting investment choice versus gold bars. We have a page dedicated to gold Britannia coin designs.
We are currently comparing bullion Britannia coins against bars, but if you wish to collect these coins in higher grades and specific years you can expect to pay slightly higher premiums. You may also want to be cautious of ridiculously high asking prices for slabbed Britannias. We have seen a 2018 Britannia for sale at £1450 in November 2018 where we offer the same coin for ASK. If you’re thinking a slabbed coin offers better protection, we store high value graded collectable coins (e.g. sovereigns) in capsules. This maintains their condition and offers protection, and we sell these for 50p! You can view our capsules for Britannias here. In our opinion, the slabbed coins do offer protection, just be careful not to get ripped off by coin marketing companies as slabbed coins are probably worth around £10 more and not £500!
Gold bars can be attractive and offer an easy way to store and stack due to their uniform size. They will fit nicely into small storage safes, below the floorboards, or if you wanted Chards to store them on your behalf, we can easily store large amounts of money in our secure strong rooms over a very small footprint.
In our opinion, the designs of the Britannias make them a more interesting option than gold bars but each to their own. We have many customers who look for specific brands of bars such as Perth Mint or Metalor or even specific designs for birthdays, weddings or religious holidays.
For those customers who want to buy gold bars, they are available in many sizes. If you have the budget, how about a 12.5kg London good delivery bar? We also stock 1 ounce, 2 gram and 1 gram for a smaller budget.
We will always recommend gold Britannia bullion coins over gold bars due to their price (premium), flexibility, tax status and visual appeal. Unless you can find gold bars at very low premiums and avoid capital gains tax, we do not see how gold bars make a better investment than gold Britannias. If you're interested in buying gold Britannias or bars, you can do so direct from the links below:
Price Comparison - Gold Brits Vs Bars
You may wish to view all of our articles on our gold guide.
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We are not financial advisers and we would always recommend that you consult with one prior to making any investment decision.