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Updated: 03:14 24/06/21

UK gold reserves

Gold reserves are one of the measures taken by a country’s central bank to insure against financial collapse. Despite having one of the world’s largest economies, the UK’s gold reserves are only the 16th largest in the world.

UK gold reserves are currently estimated to be 310 tonnes and are held in the Bank of England’s vault, as shown in the picture below.
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The Bank of England vault, holding the UK's gold reserves.

Gold reserves in the Bank of England’s secure vault. Photo courtesy of the Bank of England Flickr account.

The majority of the UK’s gold reserves are held in the form of 24-carat gold bars, but older gold could be of 22-carat purity or lower - depending on how old it is and where it came from.

Although the UK’s gold reserves are surprisingly small, the vault at the Bank of England holds the second largest amount of gold in the world. The BoE holds gold reserves not only for the UK, but a number of other countries around the world. The historical reputation of the UK, and security at the Bank, means that international gold reserves are sometimes kept in London rather than in the owner’s country.

The Bank of England reports that they currently hold around 400,000 bars of gold, with a value over £100 billion. Only America’s Federal Reserve in New York holds more gold.

Interestingly, most of the UK’s gold reserves were actually removed from London and shipped to Canada during the Second World War. Seeing the progress Germany was making across Europe, Britain was becoming increasingly worried that an invasion could happen. Multiple ships laden with UK gold reserves set out in secret from ports across the country, bound for Ottawa and Montreal where the gold could be safely stored. Surprisingly, considering the size of the operation – which involved thousands of people across multiple countries – the gold arrived safely, with every ship and every container accounted for.
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UK gold reserves sale

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The UK followed the gold standard up until 1931, and as such kept a significant holding of gold reserves. As of the 1950s, UK gold reserves were 2,543 tonnes – eight times higher than those currently held. The chart below tracks the amount of gold reserves held by the UK from this time, to the present day.
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Chart show the history of the UK's gold reserves

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This was reduced steadily over the course of the 1960s, and an additional large sale was made in 1970 in response to a devalued Sterling exchange rate, as well as to pay off debts to the IMF.

From 1980 until the late 1990s, UK gold reserves were kept steady at around 650 tonnes before what would become the infamous sale of UK gold reserves by then Chancellor of the Exchequer – and eventual Prime Minister – Gordon Brown. During this time UK gold reserves were halved to the current levels of 310 tonnes.

Brown had hoped to raise capital at a time when gold prices had been relatively flat. Mismanagement and poor timing however resulted in a poor price for the gold sold, and given the huge increase in gold prices since, it has gone down in history as a significant mistake.

Read our full analysis of the infamous ‘Brown’s Bottom’ gold sale.

Many central banks have been increasing their reserves in the past two years, but so far the Bank of England has continued to maintain its holdings at 310 tonnes.