The leader of Reform UK, Nigel Farage, is facing significant criticism over a lucrative second job where he is paid approximately £400,000 annually to promote the idea of investing pension savings in physical gold.
A Lucrative Side Role
Farage earns the substantial sum for a role requiring an estimated four hours of work per month with the company Direct Bullion. In promotional videos for the firm on platforms like Facebook and YouTube, the political figure advocates for using self-invested personal pensions (SIPPs) to hold physical gold, describing it as a method to "protect and grow your wealth" in a tax-efficient manner.
However, scrutiny has revealed that not all of these videos contain clear disclaimers stating that the value of gold can fall as well as rise, or that his comments should not be taken as formal financial advice. The videos also frequently omit mention of associated storage costs and the fact that gold, unlike shares or bonds, does not provide a regular income through dividends or interest.
Experts Issue 'Niche' Warning
Pensions specialists have raised serious concerns about the promotion of such investments to the general public. Tom McPhail, a governor of the Pensions Policy Institute, labelled the strategy as "pretty niche stuff" suitable only for sophisticated investors who understand how it fits into a diversified portfolio.
"For 90% or more of the population, join your workplace pension, go into the default fund," McPhail advised. "The people who could be looking at [buying physical gold] should be reasonably sophisticated investors. It’s definitely not for most people." He expressed concern that Farage's strong personal brand could lead some to follow his guidance without proper consideration of the risks.
Tom Brake of Unlock Democracy has referred the promotional material to the Advertising Standards Authority (ASA), questioning whether it meets regulatory standards, particularly highlighting videos with tiny or missing disclaimers.
Defence and Further Financial Interests
When questioned, a spokesperson for Reform UK dismissed the criticism. Farage himself defended his position, stating, "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.
This role is one of several held by the MP for Clacton alongside his political duties. His other positions include:
- A presenting role at GB News, earning roughly £450,000 since entering parliament.
- A column for the Daily Telegraph, bringing in £48,000 a year.
- A commentary role with Sky News Australia, paying over £50,000 annually.
While some investment analysts acknowledge that gold can have a place in a pension, they stress the need for caution and proportion. Kate Marshall of Hargreaves Lansdown suggested exchange-traded commodities (ETCs) as a simpler, lower-cost method of gaining exposure to gold prices, rather than dealing with physical bars and coins directly.
The controversy highlights ongoing debates about the appropriateness of MPs' external employment and the responsibility of public figures when endorsing financial products to their followers.
