Just as I warned in late 2015, economically speaking 2016 is turning out to be a very bumpy ride and the frequency of the bumps is getting more intense. Yesterday the headline read, “The pain returned for global investors this afternoon as the FTSE 100 hit lows not seen for more than three years and talk about another ‘financial crisis’ reared its head.” But this morning the headlines read, “Markets tumble on Wednesday amid fears over fresh crisis after banking stocks fall to lowest level in nearly four years.” From a low not seen in three years, to a low not seen in FOUR years. That means many people lost a year’s profit in a day! We do not want any of our clients to be among them!
The continuous turmoil in the stock market also shows an acceleration in the pace of the coming economic crisis. From 2013 to 2015 it has been like watching something occurring in slow motion, as all the pieces in the economic global puzzle continue to be placed, sometimes very quietly, into their slots. All of us at the office would have thought the financial crash, and the corresponding rise in Gold and Silver as a safe haven, would have happened sooner – hence the feeling of observing in slow motion. But the whitewashing of the terrible economic trouble we are in as a global economy has deferred the crisis many times. But mathematically, that is all it can do, kick the can further down the road. At some point, we are all going to see the bankruptcy of the current fiat currency system as it transitions, I believe, into a new world reserve currency.
My elderly parents have recently down-sized to a bungalow by the sea. My elderly father noted over the phone yesterday how huge the waves have been this week during yet another U.K. storm. A neatly symbolic picture of the financial news too, as shipping shares plunge: “It’s never good when one of the world’s biggest shipping lines says profits are plunging. That’s because container companies, like Moeller-Maersk, are widely seen as a bellwether for the global economy. If things are looking bleak for Maersk, that doesn’t bode well for the rest of us.” (The Telegraph, 10 February 2016)
If we look carefully, there are so many clues as to what’s coming, the more important question is not the wistful, hypothetical, “What would I do if an economic crash happened” but, “How am I, and my family, preparing for the absolute inevitable?” I believe it really is time to shift gears in that mental preparation, face the facts and take actual steps to protect ourselves:
“While it is easy to suggest that the current sell-off is an over-reaction where banks are concerned, confidence is everything, and as we know from 2008 once it is gone it is very difficult to get back. With economic growth showing signs of slowing, and interest rates already at record lows and in some case negative, the capacity for banks to build up resilience and improve their profitability is becoming that much more difficult, as central bankers around the world fumble around in the dark. Seeing the current turmoil being wreaked in financial markets surely it is inconceivable that central bankers will continue with a policy that in essence yields no discernible benefit, and simply prompts counter reactions of pass the parcel by central bankers across the world, essentially rendering the whole policy ineffective, but doing enormous damage to long-term savers and pension funds.”
How Can You Safe Guard Your Pension?
We, at Bleyer, regularly research and share with our clients and readers all we can see coming in the financial markets. It’s never an exact science and we would never presume to say so, but with thorough research and keeping awake to the economic shifting times, it has been possible to predict several of the major financial moves, over the last few years particularly. For a read through our previous blogs it is plain to see how often we called a development out before it become main stream news. With interest rates now in negative figures in many European countries, it is obvious that pensions are more of a gamble than they have ever been. This is because our pensions are, usually, so closely linked to the stock market. For many of us, this is the most exposure we will have to the stocks and shares news impacting our daily and future well being. For some of our readers, you have been directly invested in the stock market but have moved some or all of your portfolio out of the FTSE and into the traditional store of value that is Gold and Silver. But is this possible for your pension pot?
Thankfully, in the last few years, there has been two major changes to pensions:
1) The government has made it easier to access your own pension pot
2) We can now put our pension pot into owning Physical Gold, an asset not only “outside” the stock market as such but often reacting in opposite moves to it.
Can I invest my pension in gold?
There are a few simple rules to doing this: “Generally, if you can touch, stroke or enjoy something then you can’t buy it with your pension. This naturally rules out cars, tapestry and fine wine but also commodities and precious metals such as copper and silver. An exception, though, is gold (well, some types of gold). Some SSAS and SIPP providers allow you to use your pension funds to buy investment grade gold bullion, provided the gold bullion is in a form acceptable to HM Revenue & Customs and you or anyone connected to you cannot get any personal use from the asset. As the gold must be in the form of a bar or a wafer, gold coins and sovereigns do not qualify and the gold bullion must be professionally stored. There are a number of providers who will sell investment grade gold bullion to pension schemes. It worth considering the reputation of the provider and the gold it is providing before carrying out any transactions with them.” (Every Investor)
Why is this Pension Information so important to share?
I enjoy researching the information we give to you, our clients and readers. But this week, some of the facts I’ve researched touch my heart, because I have many elderly friends and, of course, my parents. We do not want any of our more mature readers to become a statistic. Here is just some of the facts released by Age U.K. this month:
- There are over 23.2 million people aged 50 years and over, over a third of the total UK population.
- The population over 75 is projected to double in the next 30 years
- 39% of people aged 65+ think businesses have little interest in the consumer needs of older people.
- 56% think there is poor pension provision for older people
- 1.6 million pensioners (14%) live below the poverty line, with incomes less than £224 per week after housing costs
- One in six pensioners in rural districts lives in low income. This proportion is similar to that in urban districts
- According to the latest DWP statistics, nearly a million pensioners (9%) would not be able to replace a cooker if it broke down
We are seeing paper currencies around the globe plunge into negative interest rate territory. We do not need to tell you what this does to a pension.
So, How Does it Work in Practice?
Buying Gold for your pension pot is actually quite straight forward, although with any change with our finances it may take a meeting or two and some effort. We can ensure you get up-to-the-minute financial information but we cannot, as much as we’d like, sit through a meeting or two for you! I have many a memory of sitting through a very long winded meeting every two years, in order to move my mortgage from one discount mortgage to another. I paid a fee of £200 at the time to the financial advisor but saved up to £1800 each time on my mortgage payments, a profit of £1600 each 24 months for two hours of listening and filling our forms. Not bad! Plus it was satisfying not letting a bank get more of my hard earned money! So, here’s how it works:
If you are a UK citizen, you can invest in Gold Bullion through your Self-Invested Personal Pensions (SIPPS). SIPPS are personal pension schemes containing a basket of investments of your choosing until you retire and start to draw a pension income. SIPPs can hold tangible investments, which can now include Physical Gold. Investments made in Gold bullion are topped up in the form of tax relief, meaning individuals can claim back the tax on the money they put in. The amount varies depending on the income tax band into which they fall, so if you are a higher rate tax payer you can get up to 40% back. So, for example, a £10,000 investment will only cost you £6,000!
Physical Gold is allowed in a SIPP providing it is investment gold, as defined above. The bullion must be stored at ‘arm’s length’ with a secure third party. It cannot be taken possession of and used as a “pride in possession” article. It can, like any other investment, be sold within the pension wrapper and then the cash re-employed within the normal rules of a SIPP pension. Thus Physical Gold is allowed in your SIPP when we store it for you. Please call one of the Bleyer Team to find out more. We maintain the Gold in your SIPP Gold account, while you are in complete control in instructing an Independent Financial Advisor (I.F.A.) and a Trustee Company will manage your SIPP Pension as a whole. You will instruct us to either communicate directly with you or with your I.F.A. / Trustee, whichever you would like. Once contributions have been made to a pension, you cannot withdraw funds until the age of 55 but you can change the investments and move provider and under the new pension rules leave your pension pot, if anything there remains unused, to your children.
The overheads, particularly setup fees are linked more closely to the work involved rather than the value of the gold. Therefore this is not really worth doing for very small amounts of gold. Ultimately it is up to you but we think you should be thinking of £10,000 plus.
In order to move your pension and buy gold the steps are as follows:
- Open an account with Bleyer
- We can introduce you to an advisor if you don’t have one, to set up your pension for you. There will be some setup fees but going forward you only pay when they do something for you. The more advice and involvement you want the more (or less) they will charge.
- Complete a discharge or transfer form with your current provider to move the assets into Gold, the advisor can help with this.
- The funds get moved across either in species (as they are i.e. stocks etc) or are sold and come across as cash.
- If you plan to swap whatever you are currently holding for Gold it would make sense to sell first and send cash across. We recommend you look at the charges and see what method offers best value.
- You then reinvest the funds into Gold Bullion assets of your choosing that fit the criteria for SIPP pensions. Our pensions administrator provide an ‘execution only’ service, they cannot give you any advice by law.
- In the case of Gold you would instruct the administrator to buy gold through us which we will buy and store for you.
To talk this through with no obligation to just find out more about how Gold could protect your Pension Pot, or to begin setting up your Gold pension, call one of our professional, approachable team during office hours or send us an email:
Telephone: 01769 618618
You will need to allow for storage charges and we should also remind you that although it can appreciate hugely in value, Gold as an asset, does not generate any income.
Bleyer Bullion is a leading UK supplier of fine gold for pensions, we source your Gold at the lowest current market prices and store it for you in an allocated account in one of our vaults. This means it’s LEGALLY YOUR GOLD, we just store it for you as by law a person cannot physically hold their own gold in their pension pot. But they can hold it at arms length.
A final added TAX bonus is that with your pension investment in gold there is no Capital Gains Tax incurred when you sell your gold when you hold it in your pension scheme.
We hope that doesn’t sound too complicated. It is, like anything, a process, with someone helping your through each step as you go. Then, once it’s done, it’s done. Sit back and know a percentage of your pension pot is no longer stuck in the stock market!
We have experts on hand to advise you on using Gold as part of your pension. If you have any questions about starting a Golden SIPP or SSAS then please use the website live chat or phone our friendly team on 01769 618 618 during office hours: Monday to Friday 9.00 am to 5.00 pm.
In conclusion, I read a stunning metaphor for the coming economic crash yesterday: “Europe’s ‘doom-loop’ returns as credit markets seize up.” A “doom-loop” is described by the author as, “Europe’s doom-loop is a vicious cycle where distressed banks and sovereign states each drag each other down into the vortex.” (Ambrose Evans-Pritchard, International Business Editor, The Telegraph)
I often find it important to read both from the right of the political aisle to the left, as intrinsically, each will emphasises either different facts, or a different conclusion on the same facts. But what is marked both by The Telegraph and The Guardian, for example today, is their utter agreement on the state of ill-health in our economy: “European shares were expected to fall at the opening on Wednesday morning, according to futures trading. One analyst said markets could be seeing the start of the “final capitulation” as the attempt by central banks to stimulate growth with cheap money since the global financial crisis in 2008 had run its course. “The artificial support from central banks is at a crossroads,” said Evan Lucas, of IG in Melbourne. “Central bank intervention will no longer create the holding pattern of the past year; markets now believe banks are out of ammunition.” (The Guardian, 10 February 2016)
The trouble with this impending economic collapse is that we, as a nation, have never been more intertwined with the financial illness of other nations: “They are figures that could make any investor panic. Since the start of the year, Credit Suisse has lost 40 per cent of its value, UBS is down almost 30 per cent, and French giant Societe Generale has lost around 31 per cent. On Wall Street, Citigroup has dropped by more than 27 per cent, Bank of America is down by almost 28 per cent, and Morgan Stanley has shed almost 25 per cent. In Britain, the biggest banks have seen more than £40 billion wiped off their value since the start of the year, in a major blow for investors and pension savers.” (Daily Mail, 10 February 2016)
This is just what we have been warning our readers about for months. We believe if we have reached the time when it is highly prudent to move some of our finances into a different sector away from stocks and shares, into assets of real historical value such as Gold (for Pensions and Savings) and Silver (for Savings), we would be wise to encourage each other, in all good faith, to do so.
Addendum: I spent the later part of the day viewing “Margin Call”, a film I have long meant to watch. Made in 2011, it follows the key people at an investment bank, over a 24-hour period, during the early stages of the financial crisis of 2008. Brutal and real, the boss of the entire operation makes the most stunning statement regarding fiat currency 10 minutes from the end: “It’s just money, it’s made up; pieces of paper with pictures on it so we don’t have to kill each other just to get something to eat.” I believe we are there again, in the beginnings of the Margin Call; 2008 all over again but on steroids. I will be away next week visiting family but wish all our readers a good fortnight. The Bleyer Team very much look forward to hearing from you. Please browse our Gold and Silver coins and bars today via our website, call on 01769 618618 or use the online shopping basket to hold some of your wealth in Physical Gold and Silver now. For the record, the price of Gold went up 10.639% in the last 30 days (Kitco). It is increasingly important in these times to do all we can to ensure we are not left behind.