‘VCTs can supplement pensions and Isas’

The managing director of business development for London-based Bestinvest, said that investors and advisers should be mindful that VCTs were “specialist investments” with a narrow focus on “very small and illiquid companies” and higher costs than mainstream funds.

He added: “Importantly the tax breaks are also better on pensions. For high earners the tax reliefs on pension contributions are in effect 45 per cent, whereas a VCT provides relief at 30 per cent.”

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