A right royal mark-up: 'Investing' in coronation coins is a costly mistake

Buying a limited-edition gold coin might seem like the perfect way to commemorate the coronation and give your children a valuable inheritance. But you're likely to be paying over the odds - with little prospect of earning a king's ransom if you sell.

In September 2022, while the country mourned the death of the Queen, purveyors of specially minted coins had already gone into overdrive.

Barely a month later, Instagram users saw ads for a commemorative coin showing juxtaposed portraits of the Queen in her youth and old age, with the dates 1926 - 2022. 

Very soon after that, coins went on sale bearing the words ‘Charles III’ – some of which had already sold out months before the coronation.

'Collector' or 'commemorative' coins vary hugely in quality, with some minted in solid 22-carat gold to the highest finish, known as ‘proof’.

Costing hundreds or thousands of pounds, they are sold by the Royal Mint as well as an array of private companies, and can make for fine mementoes or gifts – akin to jewellery.

But we’ve seen people lose large sums after collecting commemorative coins in the misguided belief that they are gold investments.

Can you invest in coins?

Our February 2023 survey of 1,068 Which? members found 8% had bought a coin as an investment. More than half of those members (55%) bought a specially minted collector coin.

That’s the wrong type of coin to buy as an investment, and anyone doing this is very likely to lose money.

Broadly speaking, there are three types of coins you might buy, and only one is suitable as an investment - those are bullion coins. 

They aren’t collectable in their own right (although the designs can be attractive) and they can generally be bought at a margin of 3% to 5% over the value of the gold they contain.

By contrast, numismatic coins are rare, often old, and usually originally minted for circulation, rather than for collectors. 

They’re collected by coin specialists (known as ‘numismatists’) and can sometimes sell for many times above their face value, despite containing little, to no precious metal, but even this is unpredictable and it's not recommended to buy them as an investment. 

Sitting between these two categories are collector or commemorative coins. They can be solid gold or silver, gold-plated or base metal, and they are often marketed as ‘limited edition’. It's these coins which can cause novice investors to run into trouble.

• Find out more:Investing in gold explained 

Coin confusion

You might think that the beautiful design and quality, connection to historic events, or limited production run would be enough to secure a profit on the finer collector coins. But it isn’t.

The value of such things is highly unpredictable and past events provide little guide. 

There was only one commemorative coin minted for Elizabeth II’s coronation in 1953, a five shilling coin of which over six million were made; we found it on sale for £3.

There are many more versions of Charles III coronation coins, and while some are labelled limited edition, the cumulative deluge could reduce perceptions of rarity. Nor can you assume that 70 years from now coin collecting will be as popular.

The only reliable measure of a coin's value, therefore, is the content of precious metals it contains. But even if a coin contains precious metal, that doesn't make it a good investment.

Gold mark-up

We’ve found the price of Charles III commemorative coins often includes a huge mark-up on the value of the gold within. 

For example, the ‘Passing of the Crown’ 22-carat gold proof quarter sovereign, sold by the London Mint Office - no relation to the Royal Mint - costs £399. The gold is worth about £94.

The price of gold had increased by 48% over five years, as of 26 April. But if you bought the Mint’s quarter sovereign, you’d need a return of 332% over the next five years to equal what you paid for it. 

That seems far-fetched for any investment, not least because the price of gold has risen by just 2% in the past 12 months. 

Like any investment, gold and silver prices can always fall, or lag behind the rate of inflation, so your money is losing value in real terms. If you want to invest in gold, see our tips below or speak to an independent financial adviser.

Here are four coins we've found being sold at high premiums on their gold value - and one bullion coin with a far smaller mark-up:

Note: costs, gold values and mark-ups correct as of 18 April.

What about my loose change?

Numismatic coins have become more prominent in recent years, with the Royal Mint generating huge interest by releasing eye-catching 50p designs into general circulation.

The most legendary of these, the 2009 Kew Gardens 50p, can sell for hundreds of pounds at auction, but other popular modern coins from circulation generally fetch less than £20.

The thrill of seeking these numismatic coins in your loose change is understandable. But the Royal Mint also sells ‘box fresh’ specially minted collector coins that have never been in circulation.

Popular recent ranges include Beatrix Potter and Harry Potter. These are distinguished from investor coins on its website and there is no suggestion that the Royal Mint is behaving improperly or misleading people.

However, it’s possible that the buzz around freely circulating 50p coins has bled into other types of coin, resulting in some people making inexpert decisions.

You can get an understanding of how rare a coin is using the Scarcity Index published by Change Checker - though this can't predict future demand or value.

Three better ways to invest in gold

Gold should only be a small part of your investment portfolio, alongside shares and bonds. Here's how you can invest in it:

Physical gold 

Bullion bars and coins are generally sold at a small mark-up on the current value of the gold they contain, so they’re a more efficient way to invest. 

The upfront expense is high though, and you need to factor in the cost of storage if a third party looks after your gold, or delivery and insurance if you keep it at home.

Exchange-traded funds and exchange-traded commodities

These investment funds can be cheaper upfront, as you don’t have to buy whole bars or coins, but you will pay fund fees, plus the cost of the investment platform you use.

Both ETFs and ETCs aim to track the price of gold, and you can buy and sell them easily via investment platforms and shield them from tax in stocks and shares Isas.

Shares in gold-related companies

You can also buy shares in firms such as mining companies. Be warned that share prices can be volatile and don’t always track the gold price – for example, if a mining company is badly managed, owns unproductive mines or operates in unstable countries. 

Buy shares of firms operating in different mines and regions so you're not hit too badly if one firm fails.

What coin sellers tell us

The Royal Mint says that its commemorative coins are ‘of the highest quality available, with each one individually struck, handcrafted and produced in limited numbers’.

The manager director of Hattons of London, Simon Mellinger, told us: ‘Proof coins are created in a very labour-intensive fashion which involves striking the coin numerous times in a dust-free environment to create a flawless mirror finish to the coin [while] bullion coins are spat out of machines like circulation coins with no real concern over their quality.’

Mellinger says that Hattons never promotes investment potential, nor mentions investment value in its ads. The Hattons website, however, notes that it’s the only company in the industry that offers a buyback programme when coins have sold out. This involves buying coins back from customers ‘at a premium’ to resell to others who missed the offer.

Both organisations pointed to positive feedback from clients. We received no response from either London Mint Office or Coin Portfolio Management.