Vocal Voices

Our pension funds are being "encouraged" to invest in British start up firms by our government.

This makes me a bit uneasy. This idea comes from the Tony Blair Institute and is being put forward by our Chancellor, Jeremy Hunt.
Pension funds are there to provide an income for pensioners, not to play roulette with their money.

Reading round and the idea comes from Mr J Hunt esq in his Mansion House speech and not from the TBI, which is mildly critical on some issues.

However, the reception from industry is generally positive, all of which, given the track record, probably means that it is nowhere near the hype. "Investing" (spiving) in any type of start-up is always a risky business hence the warnings in adverts - in very very small writing or given in a million word per minute spiel - that funds can go down a well as up have to be made. Caveat emptor.

Thankfully I am fully retired. I get the state pension, a military pension and a couple of short-term minor private pensions from years back which, if I am lucky, might cover my milk bill.

I don't think the idea is necessarily a bad thing in itself.

Fund managers will invest in a basket of shares - some of which will carry an amount of risk. But the overwhelming investment of funds will be in gilts, bonds and income-generating main-stream shares like Shell or BP.

If the Government want to encourage start-ups, they should be looking at offering bigger and better tax breaks.

Stats show that some 60% of start-ups fail within three years and that it takes seven to 10 years for them to become truly established. Even then, for many of them, long,term profitability in some sectors remains on a knife edge. Being "high tech" is no guarantee of success so focussing on that sector seems a bit strange.

A lot of start-ups go under with debts and owing money and for that reason I am against tax breaks. Let the venture capitalists fund them.