VCT investing is a no-brainer: Pensioner

London-based David Elias Sherman, 80, said he received a tax-free yield of 6.74 per cent from an investment in the Albion Ventures VCT last year, and was embarking on his fourth investment in the trust.

He said: “Anyone commencing today would be investing in 75 different companies with £250m, providing a predictable monthly tax-free income.”

Mr Sherman, who used to be a financial services marketing manager, said 61 per cent of these investments were asset-backed, with 12 per cent in cash and only 27 per cent in equities.

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Adding this “security” to the 30 per cent income tax relief available on VCTs, has meant that he expected to enjoy an attractive monthly tax-free income.

This follows an announcement by Baronsmead that all four of its VCT offers have been closed after meeting investment subscription targets.

The Bestinvest five-star rated Mobeus Linked Offer has just £8.8m capacity left and Octopus Titan has the scope to extend its target from £35m to £50m.

Bestinvest is a VCT broker and provider of VCT-related market information.

Adviser View

Patrick Connolly, head of communications for Somerset-based Chase de Vere, said: “We use VCTs and enterprise investment schemes for our wealthier clients. The starting point is generally for people who have reached their Isa and pension allowances. The tax breaks are attractive but you have to also remember the risks involved.”