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Allocated gold is gold where specific bars or coins are registered in your name and set aside for you in a vault. Unallocated gold is a claim on a pool of gold - you are a creditor of the institution holding the metal, not the owner of specific bars.
The distinction matters most if the institution holding your gold becomes insolvent. Before choosing a storage structure, see how to invest in gold in the UK for an overview of the main options.
The four storage structures
| Type | Who owns the metal | Risk if institution fails |
|---|---|---|
| Allocated, segregated | You own specific, identified bars/coins in a named location | None - the metal is yours, not the firm’s |
| Allocated, pooled | You own a share of a specific pool of gold held on your behalf | Low - gold is off-balance-sheet; pro-rata claim on the pool |
| Unallocated | You have a contractual right to gold; no specific metal is yours | High - you become an unsecured creditor |
| Gold account (bank) | A liability of the bank | Counterparty risk of the bank |
What happens in an insolvency?
With allocated, segregated gold
The metal is yours, not the firm’s. If the vaulting company fails, an insolvency administrator cannot distribute your specific bars to creditors - they’re not the firm’s assets to distribute. You apply to have your metal returned. This is the cleanest ownership structure available.
With allocated, pooled gold
You have a claim on a specific pool of gold held on trust, off the institution’s balance sheet. In an insolvency, that pool is returned to clients pro-rata. Marginally more risk than segregated if the pool is not properly administered - but designed from the outset to be off-balance-sheet, which is the key protection.
With unallocated gold
You are an unsecured creditor. If the institution fails, your gold claim ranks alongside suppliers, bondholders, and other creditors. In practice, this means you may receive pennies in the pound.
The Lehman Brothers precedent is relevant here. Lehman Brothers operated gold accounts and similar financial products. When it failed in 2008, clients with unallocated commodity positions found themselves as unsecured creditors - not owners of physical assets. Recoveries from the estate took years and were incomplete. The Lehman collapse is now the standard reference point for counterparty risk in commodity accounts.
Who offers what
| Provider | Storage type | Notes |
|---|---|---|
| BullionVault | Allocated, pooled | Gold held in your name in pooled vault. Off balance sheet. Regularly audited. |
| Royal Mint Vault | Allocated, segregated | Specific bar allocated to you. Highest ownership confidence. |
| Most bank gold accounts | Unallocated | Standard UK bank gold accounts are unallocated - you are a creditor. |
| Brinks / Loomis (via dealers) | Allocated, segregated | Professional vault storage. Used by institutions and high-net-worth individuals. |
| Royal Mint DigiGold | Allocated | Described as allocated. Verify terms carefully. |
| Gold ETF (iShares IGLN etc.) | Allocated (via ETC structure) | Underlying gold is allocated in custodian vaults. ETF holder has a beneficial claim. |
Questions to ask before storing gold with any provider
- Is my gold allocated? If the answer is not a clear yes, it is unallocated.
- Is it segregated or pooled? Both are generally safe; segregated is marginally cleaner.
- Can I see the bar list? Legitimate allocated storage providers can show you the specific serial numbers of bars held on your behalf.
- Is the gold on or off the provider’s balance sheet? Off-balance-sheet means it does not form part of the firm’s assets in an insolvency.
- Is it insured, and by whom? Most professional vault providers carry Lloyd’s of London insurance on stored client metal.
- Is the vault independently audited? Annual audits by a recognised firm add confidence.
Physical coins at home
If you hold Gold Sovereigns or Britannias at home, the allocation question is irrelevant - you own them directly and there is no counterparty risk. The risk instead is physical: theft, fire, or flood. See our home storage guide for practical security considerations.
Tax and regulation
Counterparty and ownership structure do not change the CGT treatment of your gold. Allocated gold held in a vault that subsequently goes to a buyback dealer is still taxable or exempt based on the product type, not the storage structure.
Physical gold storage is not FCA-regulated as a financial service. There is no FSCS protection for stored bullion at any UK vault provider, regardless of ownership structure.
This guide contains factual information only and does not constitute financial or tax advice.
How people usually decide
Most retail investors on established platforms - BullionVault, Royal Mint Vault - are in allocated pooled or segregated storage and are fine. The risk of one of these providers collapsing is low, and even if they did, your gold is not their asset to distribute.
The category to actively avoid is bank gold accounts. If you hold a “gold account” at a high street bank - the kind you open through an app - it is almost certainly unallocated. You are a creditor with a gold-shaped liability, not an owner of a physical asset. If the bank fails, you queue alongside everyone else.
For physical gold in accessible quantities, the cleanest answer is to take delivery and hold it yourself. No counterparty, no storage fee, no need to think about insolvency structures at all. Find the best-value gold dealers here.
Frequently asked questions
Is BullionVault gold allocated? Yes - BullionVault holds client gold in allocated pooled storage. Your gold is on their bar list, off their balance sheet, and not available to their creditors in an insolvency. It is independently audited.
Are gold ETFs allocated? Physically-backed gold ETCs (like iShares IGLN) hold allocated gold in custodian vaults. The ETC structure means you have a beneficial interest in that gold. In an ETC insolvency, the underlying gold is liquidated and returned to unit holders - you are not an unsecured creditor.
What is the safest way to hold gold? Physical possession - coins and small bars at home or in a private safe deposit box - carries no counterparty risk. The trade-off is security, insurance, and convenience. For larger holdings, allocated, segregated vault storage at a reputable provider is the institutional equivalent.