Nigel Farage has been criticised over his £400,000-a-year second job promoting the idea that people should buy physical gold and put it into their pension pots.
Farage is paid more than four times his MPs’ salary for the four-hour-a-month job at Direct Bullion, where he has featured in Facebook and YouTube videos.
These include reels where Farage explains “how you can protect and grow your wealth with tax-efficient gold” by putting it into self-invested personal pensions.
However, not all of the Reform UK leader’s videos include disclaimers that the value of gold can go down as well as up, or that his comments should not be considered investment advice. He also does not mention storage costs or flag that gold does not bring in a regular income in interest or dividends.
One pensions expert, Tom McPhail, a governor of the Pensions Policy Institute, described the idea that people should be converting some of their pension into physical gold as “niche” and suggested it was appropriate only for sophisticated investors.
“There is nothing inherently wrong with holding actual gold,” he said. “But you have got to look at the transaction and storage costs and the whole thing in the round. It is pretty niche stuff.
“For 90% or more of the population, join your workplace pension, go into the default fund, have a mixture of bonds and equities, plus property and cash. Just do that. The people who could be looking at [buying physical gold] should be reasonably sophisticated investors. It’s definitely not for most people and should only be done by someone who understands how physical gold fits into a diverse portfolio.”
He added: “You can make the argument that he’s just acting as a billboard, saying, ‘how about investing in gold? Talk to these guys, who will tell you about the details.’ But it does feel quite irresponsible. Farage has a strong brand. Not everybody likes him, but some people really like him. So when Nigel tells you to invest in gold, you might just dutifully do what he tells you. If I were to put all my money in gold, that would be a really high-risk thing to do.”
Tom Brake, the chief executive of Unlock Democracy, said he had raised the Direct Bullion videos promoted by Farage with the Advertising Standards Authority (ASA), asking them to look into whether the online material met its standards and whether it fell under its regulatory orbit.
He highlighted two videos where there were no disclaimers, and pointed to another where he said the disclaimer at the end was in such a tiny font and appeared so fleetingly there was a danger the viewer may not see it.
A spokesperson for Reform UK, asked whether it was appropriate for an MP and political leader to suggest people used their pension pots to buy gold without disclaimers that the value could go up and down, or explaining that gold did not bring in regular income or making clear any storage costs, said the party “took pity on the Guardian for not having better things to do with their time than measure font sizes”.
Farage said: “For five years I have publicly recommended that people invest a decent chunk of money into gold. Since I began my relationship with Direct Bullion, people that took my advice will have seen returns of over 100% on their money.”
Direct Bullion did not respond to requests for comment. Reform UK sources said Farage had a working relationship with Direct Bullion that preceded his time as an MP.
Promoting the company’s physical gold bars and coins is one of many jobs Farage has had at the same time as being the MP for Clacton.
The Reform leader is a presenter for GB News, and has been paid about £450,000 from that role since entering parliament. He is also a columnist for the Daily Telegraph, bringing £48,000 a year, and a commentator for Sky News Australia, which pays him more than £50,000 a year.
Other pensions experts said putting gold into pensions could be part of a diversified portfolio. Kate Marshall, a lead investment analyst at Hargreaves Lansdown, said: “Gold can play a useful role in a diversified pension portfolio, but it’s important to keep it in proportion.
“We favour gaining exposure through exchange traded commodities (ETCs), such as the iShares Physical Gold ETC, which aims to provide exposure to physical gold. ETCs are one of the simplest ways to invest and can be a low-cost way to add exposure to gold to an investment portfolio.”
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