Why I’m for “patient capital”


I missed the consultation on “patient capital” but I’m pleased that it’s resulted in a proposal was put forward by an industry panel, led by Sir Damon Buffini, which looked at ways to encourage investment in new businesses, such as tech start-ups, for the long term.

The output of Sir Damon’s work is here and it chimes with what I’ve been wanting to do with some of my retirement savings. I’m really pleased to hear Phillip Hammond mentioning the review in his Budget Speech. I hope that mature savers will be able to invest patiently for the later years of our retirement without having to worry about penal rates of taxation. Doing the right thing with money, should be tax-incentivised. While most of my thinking is about the issues of those on low-earning, I don’t see why those who have done well and saved hard, should stop because of the LTA and AA.

I am 56, have an LTA of £1.18m and am saving avidly – even though it is no longer tax-efficient for me to do so. I am currently using ISAs but I’d rather keep my retirement savings in a pension pot and my shorter term capital in my ISA pot.

People like my friend John Ralfe may snipe at entrepreneurial tax-brakes, but I’d remind them that their financial security is built on the efforts of our entrepreneurs. We cannot have social justice without the wealth they create and we need to put that wealth to good use.

The proposals themselves focus on setting up an entrepreneurs fund that has a lot to do with VCT and EIS but provides longer term funding through a special investment vehicle. The proposals talk of an “opt-in” for DC investors, but reporting in the FT and elsewhere suggest that people who use these vehicles could accumulate beyond their lifetime and annual allowances without punitive taxation.

On budget day, Nigel Wilson spoke out on the need for direct investment to help the economy, improve productivity and encourage saving. You can read what he had to say here.

We currently have capitalism without the capital, but the proposals of Sir Damon and his committee, unlock the wealth of people like me , currently sitting in the £300 bn. cash ISA pool, for entrepreneurial investment.

I look like a late convert and – for once – an advocate of a Treasury pension policy!

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in advice gap, pensions and tagged , , , , , . Bookmark the permalink.

Leave a Reply