A pawnbroker lends you money against your gold and keeps the gold as security; you get it back when you repay the loan plus interest, and if you do not, the pawnbroker sells it. That is consumer credit, governed by the Consumer Credit Act 1974 and supervised by the Financial Conduct Authority (FCA), and a firm cannot do it without FCA authorisation. A gold buyer, whether a jeweller, a "we buy gold" counter or a postal service, buys the gold outright: the title passes, there is no loan and no right to get it back. That needs no licence in England and Wales, but the moment the buyer pays or receives £10,000 or more in cash for goods it must be registered with HM Revenue and Customs (HMRC) as a High Value Dealer under the Money Laundering Regulations. Many businesses do both, and the two halves of the same shop are regulated by different bodies under different law.

Side by side

Pawnbroker (pledge) Gold buyer (outright purchase)
What happens to the gold Held as security; returned on repayment Sold; title passes to the buyer
Legal basis Consumer Credit Act 1974, sections 114-122; FCA Handbook CONC Ordinary sale of goods; Money Laundering Regulations 2017 if cash thresholds are met
Regulator FCA (consumer credit authorisation required since 1 April 2014) HMRC (anti-money-laundering supervision as a High Value Dealer, if registered); Trading Standards for consumer law
What you receive A loan, typically a percentage of the item's value, plus a pawn receipt A price, usually a percentage of melt value
Minimum redemption period Six months by law; longer by agreement None - the sale is final
If you do not come back Under £75 lent: ownership passes to the pawnbroker after the redemption period. Over £75: the item becomes "realisable"; 14 days' notice before sale where credit exceeds £100; surplus after debt and reasonable expenses is owed to you Nothing; it was never yours after the sale
Cost to you Interest - H&T's pawnbroking site quotes a representative APR of 165.5% (checked 19 August 2026) The discount to melt value
Records the business must keep A pawn record for every pledge (CONC 6.6 and the Pawn Records Regulations 1983), five years or three years after sale, whichever is longer Purchase records; customer due diligence and five-year AML records if a High Value Dealer
Examples H&T (286 stores when FirstCash bought it in August 2025), Ramsdens (over 165 stores), independent pawnbrokers Gold-Traders, Birmingham Gold Company, Hatton Garden buyers, refiner counters, most jewellers, every pawnbroker's buying desk

What exactly is a pawnbroker loan?

A pledge. You hand over an article - in the UK, overwhelmingly gold jewellery and watches - and the pawnbroker advances a sum against it and gives you a pawn receipt in the form prescribed by the Consumer Credit (Pawn-Receipts) Regulations 1983. Section 114 of the Consumer Credit Act 1974 requires the receipt and makes it an offence to take a pawn from a minor (CCA 1974, Part VIII, pledges).

Section 116 says "a pawn is redeemable at any time within six months after it was taken". The parties can agree a longer period but not a shorter one, and after the period ends the pawn remains redeemable until it is actually sold, with no extra charge for redeeming late. Section 117 says you redeem by producing the receipt and paying what is owed; if you have lost the receipt, section 118 lets you use a statutory declaration, or a simpler written statement where the credit was under £75.

If you do not redeem, section 120 splits the world at £75. Where the credit was £75 or less and the statutory six months applied, ownership simply passes to the pawnbroker when the period ends. Where it was more than £75, the article becomes "realisable": the pawnbroker may sell it, but under section 121 and the Consumer Credit (Realisation of Pawn) Regulations 1983 must first give you at least 14 days' notice of intention to sell where the credit exceeds £100, must tell you within 20 working days of the sale what it fetched and what it cost to sell, and must pay you any surplus over the debt and reasonable expenses (Realisation of Pawn Regulations 1983, as amended 1998). If the sale fetches less than the debt, the Act leaves the shortfall owing in principle; in practice pawnbrokers rarely pursue it.

The interest is the cost. H&T's pawnbroking site states "Authorised and Regulated by the Financial Conduct Authority for Consumer Credit" and quotes a representative APR of 165.5% (H&T pawnbroking, 19 August 2026). That is typical of the sector: monthly rates in single digits that annualise to triple digits. For a short bridge against an item you want back it can still beat the alternatives; for anything you do not want back, it is dearer than selling.

Who regulates pawnbrokers, and what do the rules require?

The FCA, since consumer credit regulation transferred from the Office of Fair Trading on 1 April 2014. A pawnbroker must hold FCA authorisation with the right permissions, follow the Consumer Credit sourcebook (CONC) and submit regulatory returns. CONC 6.6 is the pawnbroking chapter: CONC 6.6.3R requires records of every article taken in pawn, redeemed or sold; CONC 6.6.7R sets out what each record must contain (customer name and address, description, credit amount, end of the redemption period, interest rate); CONC 6.6.9R requires the sale record to show any surplus and when it was paid; and CONC 6.6.6R says records are kept for five years from the pawn or three years after sale, whichever is longer (FCA Handbook, CONC 6.6).

The FCA's 2018 pawnbroking sector review is the best public picture of where the sector falls short. It found that when an unredeemed pledge sold for more than the debt, "customers are not always receiving the 'surplus' money owed to them" - some firms had returned less than half of the surplus due - and estimated the harm at about £1 million a year. Expenses of sale ranged from a fixed £20 to an uncapped 20%, which the FCA found hard to justify on high-value items. It also found Money Laundering Reporting Officers unsure of their Suspicious Activity Report obligations, and unclear lines between pawnbroking and "sale and buy-back" agreements (FCA pawnbroking sector review, July 2018). Surplus, expenses and AML are what an inspector looks for first.

What is a gold buyer allowed to do, and who regulates it?

Buy gold. No licence is needed to purchase jewellery from the public in England and Wales, and the Scrap Metal Dealers Act 2013 - which does licence scrap dealers - explicitly excludes "gold, silver, and any alloy of which 2 per cent or more by weight is attributable to gold or silver" from its definition of scrap metal (Scrap Metal Dealers Act 2013, section 21(7)). So a "we buy gold" counter is outside both the FCA's remit and the scrap-metal licensing regime. In Scotland, second-hand dealers generally need a local authority licence under the Civic Government (Scotland) Act 1982; check with the council.

What does bite is money laundering. A business that accepts or makes cash payments of £10,000 or more for goods - in one payment or linked payments - is a High Value Dealer and must register with HMRC before taking the cash. The threshold became a flat £10,000 in sterling on 30 June 2026, replacing the old €10,000 (HMRC ECSH51525). Registration brings customer due diligence, a risk assessment, a nominated officer, staff training and five-year records. A buyer that never touches cash at that level is outside the regime, but most still take identification and keep a purchase record, because stolen goods and the police are routine. Our article on High Value Dealer registration covers the detail.

Consumer law applies to a gold buyer in the ordinary way - misleading claims about price, unfair terms, pressure selling - and it was consumer law, not financial regulation, that the OFT used against the postal "cash for gold" companies in 2009-2011 (OFT case, GOV.UK). And VAT: a gold buyer who sells the lot to a refiner at metal value does so under the reverse charge in VAT Notice 701/21 - see do I charge VAT on scrap gold.

What is "cash for gold", and which is it?

Usually the second: an outright purchase, marketed loudly. A counter, a kiosk or a postal pack that pays you a price and keeps the gold is a gold buyer, and none of the pawnbroking rules - six months, notice, surplus - apply, because there is no loan. The phrase has no legal meaning; the OFT case above is what happens when it is used without a per-gram price attached.

Two hybrids sit between the models and are worth naming. Sale and buy-back - Cash Converters' "Buyback", for example, where the shop buys an item and you can repurchase it within 28 days for the price plus an administration fee - is structured as a sale, and Cash Converters (UK) Limited is itself FCA-authorised (FRN 656489). The FCA's 2018 review flagged that firms did not always keep sale-and-buy-back clearly separate from pawnbroking. Pawnbrokers' buying desks - H&T, Ramsdens and most independents buy gold outright as well as lending against it - are ordinary gold buyers for that half of their business, regulated by HMRC for cash and by the FCA only for the loans.

Which should I use?

If you want the item back, a pawnbroker - that is what the product is for, and the law gives you six months and a surplus. If you do not, sell it to someone who publishes a rate per gram; our piece on where to sell scrap gold compares the channels. Do not pledge something you do not intend to redeem: you pay six months' interest and then receive the sale price minus the debt minus expenses, which is never more than a straight sale.

If you run the business, the practical point is that the two sides need two sets of records. The pledge ledger is an FCA matter - CONC 6.6, redemption dates, notices, surplus accounting, regulatory returns. The buying desk is an HMRC matter - purchase records, identity, cash totals against £10,000, the reverse charge when the lot goes to the refiner. A shop that runs both out of one till and one spreadsheet is the shop that fails one inspection or the other.

What we could not verify

  • H&T's and Ramsdens' current pawn interest rates and terms beyond the representative APR on H&T's site. Rates vary by loan size and branch.
  • Whether Ramsdens publishes a representative APR on its site; we did not locate one on the day.
  • Scottish second-hand dealer licensing as applied specifically to gold buyers. The Civic Government (Scotland) Act 1982 regime is council-administered and exemptions exist; confirm locally.
  • The GOV.UK High Value Dealer guidance page still showed the old €10,000 figure when we checked on 19 August 2026, while HMRC's own manual (ECSH51525) gives £10,000 from 30 June 2026. We have followed the manual and the amending regulations.

Sources

This is general information, not legal or financial advice. Consumer credit law is detailed and the FCA's expectations move; if you lend against goods, take advice from a consumer credit specialist before you open the door. If you buy gold for cash, read the HMRC guidance and register before you need to, not after.

Milleso handles the buying-desk half of this: counter purchases priced at weight x fineness x spot, the seller's identity and AML file taken at intake, cash totals monitored against the High Value Dealer threshold, and the reverse charge applied when the lot goes to the refiner. It does not run a pledge ledger - the FCA lending book is a separate system.