These are designed to encourage investment into areas that will generally help towards the long-term growth of the economy.  As a result, they often involve investment into small and start-up companies whose shares are not listed on the main financial markets.  Given the higher-risk nature of such investments, the government offers tax incentives to encourage investment.

The main options available are Venture Capital Trusts (VCT), Enterprise Investment Trusts (EIS) and Seed Enterprise Investment Trusts (SEIS).  Given restrictions on the amount that higher earners can pay into pensions each year, these plans can be an attractive option for those who have used their other tax efficient allowances as the tax relief on offer can be 30% of the amount invested or more.

There are also exemptions from other taxes such as capital gains and income tax along the way if certain conditions are met.

There are limits on the amounts that can be invested and given the higher risk nature of these schemes, they are not suitable for everyone but they can form a useful part of the overall picture for the right investor.