How to Buy Silver in the UK: A Step-by-Step Guide
Silver is a popular entry point for new precious metals investors, it's far cheaper per ounce than gold, but the UK rules around it are different enough from gold that they trip people up. This guide covers what changes when you buy silver instead of gold.
1. Know That VAT Applies
This is the single biggest difference from gold: investment-grade gold is VAT-exempt in the UK, but silver is not. Standard UK VAT (20%) is included in the price of every silver coin and bar sold here. There's no way around this when buying physical silver in the UK, it's built into the price you'll see quoted by every dealer, but it does mean silver's effective premium over spot looks much higher than gold's once VAT is factored in.
2. Choose CGT-Exempt Coins If Tax Matters to You
Like gold Sovereigns and Britannias, UK legal tender silver coins, the Silver Britannia is the main one, are exempt from Capital Gains Tax for UK residents. Silver bars and non-UK-legal-tender coins (such as Canadian Maple Leafs or American Eagles) don't carry this exemption. If you're buying with a view to eventually selling at a profit, this is worth weighing alongside the price itself.
3. Expect Higher Percentage Premiums Than Gold
Because silver's spot price is so much lower than gold's per ounce, minting and handling costs make up a larger share of the price. It's normal to see premiums of 20-40% or more over spot on smaller silver coins, whereas gold premiums are typically in the low single digits to low teens. A high percentage premium on silver isn't automatically a bad deal, compare the actual price across dealers rather than the percentage alone.
4. Coins vs Bars: The Trade-offs Are Similar to Gold
Silver coins are more liquid and easier to sell in small quantities, and Britannias carry the CGT exemption. Bars, especially in larger sizes like 1kg, often carry a lower premium per ounce, but you're buying (and later selling) the whole bar at once rather than in smaller units.
5. Factor in Weight and Storage
Silver is roughly 80-90 times less valuable than gold by weight, so a meaningful silver holding takes up far more physical space and weighs far more than the equivalent value in gold. This matters for home storage in particular, a modest silver holding can be genuinely heavy.
6. Compare Across Dealers Before Buying
The gap between the cheapest and most expensive dealer for the same silver coin is often larger in percentage terms than for gold, because VAT and premium both apply to a smaller base price. A few minutes comparing dealers can make a proportionally bigger difference on silver than on gold.