The service consists of five multi-asset portfolios across the usual risk levels, managed by head of research Jonathan Moyes and his team. Moyes previously co-managed £400m of discretionary portfolios at Whitechurch Securities.

Investments will be made across a range of asset classes including bonds, equities, property, infrastructure and private equity. The portfolios will contains a blend of passives, actively managed funds and investment trusts.

There will be 35-50% invested in each of passive and active funds, and 10-20% in investment trusts. The minimum investment across all portfolios is £100,000. ISA and SIPP wrappers can be used.

The average ongoing cost for the new offering, including management, platform and ongoing fund charges, is 1.08%. Wealth Club said this will mean lower costs than going through an adviser, and a similar amount to managing a typical fund portfolio on a DIY platform.

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Alex Davies, founder and CEO, said: “The Wealth Club Portfolio Service has been a number of years in the making. The idea was born out of personal experience. I have been investing since my teens and built a significant portfolio of funds and shares in ISAs, pensions and just on their own.

“While many of these made sense at the time, the result is a mish mash of different funds and shares. I wasn’t quite sure if they fitted together any more, and managing them myself was getting very cumbersome.

“And I know I’m not alone,” he added. “Many friends and clients tell us the same thing regularly. The truth is that, despite the proliferation of innovative digital investment services, the wealthier, more sophisticated part of the market remains underserved.”

Moyes added: “Each portfolio will invest across low-cost index funds, specialist actively managed funds and investment trusts. Investors can typically expect each portfolio to be invested across 30-45 funds.

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“Combining this investment approach with an online service means we can offer our clients a sensible well diversified investment portfolio. And, because the service is delivered online, at a low cost.

“We are particularly pleased to champion the use of investment trusts within our portfolios. The investment trust sector includes some real gems and allows us to boost diversification, providing access to less liquid assets such as infrastructure and private equity.”

The firm is a VCT and EIS specialist which targets early-stage investment in UK technology businesses, focusing on scalable companies across marketplaces, platforms and software (SaaS).

The launch follows the announcement by the government of the extension of the VCT regime to at least 2035.

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The Fuel team is led by MyVoucherCodes founder Mark Pearson. His track record includes early exits from tech giant Adobe and US equity management platform Carta.

Wealth Club’s Nicholas Hyett commented: “Fuel Ventures is well known in venture capital circles for its rocketship emojis and irreverent memes.

“The focus on marketplaces, platforms and of course SaaS means its investments tend to be low in capital intensity with the potential for explosive growth and high margins.

“The manager will hope its new VCT can support the successful EIS and SEIS funds by providing funding to businesses at a later stage, while also opening up the manager’s portfolio to investors who are put off by the higher risk nature of EIS or SEIS investing.”

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Using the latest numbers released by HMRC, Wealth Club identified a notable uptick in VCT popularity.

In terms of the total value of VCT investments, the figure was up by even more, rising by 61% to £1.04bn versus the previous year.

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The average amount invested by an individual was about £40,000. Investors putting in between £150,000 and £200,000 accounted for just 6.7% of all VCT investors, but 32.2% of the total money raised.

This means there were many smaller investors putting in modest sums to make the average that low.

A full breakdown of the numbers is below:

Nicholas Hyett, investment manager at Wealth Club, commented: “The trend is great news for UK start-ups, driving a 61% increase in tax relief qualifying VCT investments and significantly increasing the funding available to UK entrepreneurs through the scheme.

“The scheme could be even better though. There are signs the £200,000 a year limit on VCT investments, unchanged for nearly 20 years, is capping the funding available to small businesses.

“The largest VCT investors, those investing £150,000 to £200,000 a year, account for just 6.7% of investors, but 32.2% of funds raised,” he continued. “Almost all are hitting the £200,000 a year maximum – and would potentially invest more if the scheme allowed, unlocking significant further funding for small UK businesses.

“With economic growth and support for smaller companies a key priority for both political parties, the £200,000 limit is overdue a review.”

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IHT receipts have seen an upward trend over the last decade being fuelled by years of soaring house prices and frozen allowances.

Non-advisory broker Wealth Club have calculated that the average bill could increase to £233,000 this 2023/24 tax year with over 30,000 families having to give part of their inheritance to the tax man.

Nichloas Hyett investment manager at Wealth Club, said: “Inheritance tax has found itself the unexpected centre of the UK’s political battlefield.

“The tax pulled in over £7bn for HMRC last year and the most recent set of numbers suggests that’s set to climb again. Both the average bill and the number of families paying inheritance tax are also set to rise in the years ahead according to Wealth Club research.

“Depending on your political position that is either a good or a bad thing. But, whether you think inheritance tax is a great means of wealth redistribution or an unfair tax on those who’ve already been taxed once – the future of the UK’s most controversial tax is worth arguing about.”

Lack of understanding of IHT

The Office for Budget Responsibility’s (OBR) latest forecasts suggest that IHT will raise as much as £8.4bn in 2027/28 meaning that increasing numbers of estates are expected to fall prey to the tax in coming years.

However, research by retirement specialist Just Group released this week highlighted the lack of understanding among retirees about the current thresholds and IHT rules.

To read more on this topic, visit: Rishi Sunak to reportedly scrap inheritance tax

Stephen Lowe group communications director at Just Group, said: “Inheritance Tax may turn out to be the government’s magic porridge pot, as the freeze on thresholds until 2028 combined with the 30% increase in property prices over the past six years push increasing numbers of estates into paying the tax.

“Our research finds that a worrying number of retired people don’t have a firm grasp of the Inheritance Tax rules which could leave many families with a nasty surprise.

“The majority (59%) of retirees over 55 said they don’t know what the threshold is for the value of an estate to pay Inheritance Tax and a further 50% of this age group don’t have a clear understanding of the rules.”

Rumoured scrapping of IHT

The Government has been rumoured to be looking at abolishing IHT potentially as soon as the Autumn Statement.

Laura Hayward tax partner at Evelyn Partners commented on this, saying: “The prospect of abolishing IHT has been bounced around as an idea for a Conservative election manifesto pledge and while the Chancellor has been playing down the prospect of imminent tax cuts, it’s not impossible that he could pull a small IHT rabbit out of the hat at the autumn statement, with something like a raising of the nil-rate band.

“An immediate concern for many families is that more and more are being dragged into paying IHT by stealth as a result of a number of factors, including allowances being frozen until at least 2028 and inflationary growth of asset values.”

Frozen nil band rate

Laura Suter head of personal finance at AJ Bell explains how the nil rate band would be close to half a million per person from April next year based on September CPI figures, had it tracked with inflation but stands frozen at £325,000.

Suter said: “It means that estates are being hit with almost £70,000 of extra inheritance tax thanks to the frozen rate. Had the rates been raised with inflation a couple would be able to leave an estate worth £1m free of inheritance tax without having to navigate the complications of the residence nil rate band (RNRB).

“The RNRB, introduced by George Osborne in 2017, means that now a couple can leave a £1m estate free of inheritance tax, but only if they fit the criteria to use the RNRB and understand how to use it.

“Osborne’s plan was to give a bigger tax break to individuals, but by introducing a new allowance with complicated criteria rather than just extending the existing one, he has introduced vastly more complexity to the inheritance tax system. Many people are not eligible for the RNRB, meaning they are stuck with an IHT allowance from 2009.

“But even the RNRB has been frozen in time since 2020 when it was fully phased in. Had it been raised in line with inflation, along with the nil rate band being increased with inflation since 2009, a couple could pass on an estate worth £1,423,000 combined.

“The fact that both rates have been frozen means estates are paying up to £169,000 more in inheritance tax than they otherwise would.”