Collectable and Rare British Coins

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BR> The appeal of a coin to a collector can be down to the individual or a coin can have intrinsic collectability due to various factors. From an individual’s point of view, a collector may be looking to complete a set of coins or obtain a gold sovereign coin from a certain year for sentimental value; year of their birth or an anniversary, for instance. Collectable coins often have a higher premium attached to them due to the fact they are sought after, have a higher production cost and/or may come complete with some kind of presentation or display case/box. Collectors (as opposed to investors) are not generally concerned with the resale value of collectable coins.

British collectable coins are termed so because they fall into one of several categories, these might be:

• Rare British Coins
• UK Special Edition Coins
• Limited Edition British Coins
• Proof Coins
• Coin Sets

Rare British Coins

There are silver or gold coins that have been produced in the UK that are considered very rare due to their limited numbers. Some of these are modern with the rarity relating to discrepancies made during the minting process whilst others are due to their age and/or limited mintage. An 1819 George III sovereign, for example, is very scarce indeed with only 10 (out of 3,574 that were struck) known to still be in existence. One was last sold in 2013 for £186,000. Minting errors can also be lucrative for collectors with proofs displaying spelling or casting errors often fetching large sums.

via National Museum of American History.

UK Special Edition Coins

Special edition coins include commemorative coins to mark occasions such as the Olympics, a Coronation, anniversary of something like D-Day or other special events (domestic or international).

Limited Edition British Coins

Whilst coins that are in general circulation are minted without limit, some coins are only produced in restricted numbers. As a result, the long-term value of limited edition UK coins can rise.

Proof Coins

Originally produced as samples before going into mass productions, proof coins are only available in limited numbers. Traditionally, proof coins were cast for the approval of a reigning monarch as well as for archival purposes and to test the quality of the dies. Now, proof coins are cast in greater numbers and are often perceived to be of a higher quality. Distinguishable from bullion coins by their sharper and more defined features and rims, proof coins attract a collectability premium of around 15-20% even though the gold content is consistent with their gold bullion counterparts. Resale values rarely achieve their purchase premium as (even if stored well). Therefore, proof coins do not make a good investment over bullion equivalents but are still regarded as limited edition British coins and are sought after by collectors.

Coin Sets

When the design of a set of coins change or is produced for a special edition then collectors can purchase a full set of the new design. Usually sold in presentation boxes, coin sets, like proof coins, also attract a buyer’s premium that is rarely realised on resale. Coin sets are generally only produced for the collectors’ markets.

Whereas investors look at coins that will both hold their value as well as potentially return a good profit, collectors are simply looking to complete a collection as part of a hobby. Many collectors are prepared to pay higher prices than investors to curate certain coins; particularly rare UK coins. So, could this kind of premium offer good investment potential? Whilst precious metals can vary in price, depending on many external factors, rare coins tend to hold their value as their scarcity and rarity remain a constant, if not a diminishing, influencer.   Some investors do collect rare British coins and are prepared to pay larger premiums for them. Usually purchased at auction or via specialist dealers, buying these ancient or rare coins in the UK can attract VAT. Collectable coins like this are generally harder to liquidate as resale is dependent on finding the right buyer at the right time. Unlike gold as a commodity in the form of bars, bullion or coins, rare British coins may not be exposed to the same market volatility but rather their ‘perceived’ value. In general, unless an investor has experience of the rare coins market and is prepared to commit to waiting for the right time to sell at a profit, we would recommend caution before opting for this kind of gold investment.