EXCLUSIVE: The Venture Capital Platform is to launch a workplace savings scheme that aims to offer high earners an alternative to a pension scheme.
The investment-linked scheme, which will be launched at Employee Benefits Live on 25 and 26 September, has been developed in light of the government’s changes to the annual and lifetime allowances for pension saving.
In the December 2012 Autumn Statement, Chancellor George Osborne announced that from 2014-15 the annual allowance will reduce from £50,000 to £40,000, while the lifetime allowance will be reduced from £1.5 million to £1.25 million.
The scheme is to invest in portfolios of venture capital trusts and enterprise investment schemes.
It will work in a similar way to a money purchase pension scheme, but it is not impacted by the pension allowances. Contributions are not deducted from net pay because it is not a pension scheme.
The scheme includes:
- Initial income tax relief.
- Tax-free gains.
- No restrictions on tax-free cash.
- Annual contribution limit of £1.3 million.
- No lifetime allowance.
- No annuities.
- Investments approved by HM Revenue and Customs.
Jeremy Spencer (pictured), managing director of The Venture Capital Platform, said: “The government is constantly restricting pensions for high earners, with further changes expected after 2014.
“Our scheme is an alternative that provides comparable statutory tax incentives to pensions without the restrictions and, from April 2014, individuals can contribute more in one tax year to our scheme than they can accrue in a lifetime of pensions.”
The Venture Capital Platform will launch the scheme at Employee Benefits Live on 25 and 26 September at National Hall, Olympia.