In this exclusive interview with Tax-Efficient Investment (TEI) Magazine, Christiana Stewart-Lockhart, Director General of the EIS Association (EISA), joins us to share her expert insights on EIS and SEIS.
She unpacks the current level of risk with EIS and SEIS and reveals what is currently driving the respective markets, as well as outlining the factors affecting EIS and SEIS growth, the current state of the UK’s seed and early-growth funding ecosystem, and common misconceptions surrounding EIS and SEIS which need to be challenged.
TEI: EIS and SEIS sit at the earlier end of the market. How comfortable are advisers with that level of risk right now?
CSL: I think that, precisely because of the global uncertainty we are seeing, more advisers are looking to EIS and SEIS as part of long-term strategies. Diversification is absolutely key and, as Andy Haldane (former Chief Economist of the Bank of England) explained at an event I attended last year, being too risk-averse can be high risk in itself.
Many advisers are placing increased emphasis on diversification beyond traditional asset allocations, with a growing number considering EIS for a broader range of clients. As fiscal drag continues and the overall tax burden rises, tax-efficient investing becomes increasingly important for more individuals and a record 2 million workers in the UK are set to earn six-figures this year.
In this context, EIS and SEIS have the potential to play a meaningful role across a wider range of portfolios, particularly as a modest allocation within a well-diversified investment strategy.
TEI: What is driving the EIS and SEIS market at the moment?
CSL: There has been a clear increase in interest from financial advisers, driven in part by the recognition that clients increasingly need more bespoke solutions. We are lucky in the UK that we have such a strong and varied early-stage ecosystem. AI remains a major theme within the EIS, alongside more established sectors such as fintech, life sciences, climate tech and SaaS.
The EIS and SEIS have fuelled some of the UK’s most innovative and successful businesses over the past few decades. We’ve seen more activity around exits in recent months, and it’s interesting to see increased education driving interest in this area, with greater awareness of the importance that startups and scaleups play in the economy, and clients taking a more active interest in the underlying investments.
TEI: Is there anything that has affected or could affect the EIS or SEIS market in the past six months, the present or the future?
CSL: The Government’s continued recognition of the importance of the EIS and SEIS has been very welcome, particularly given the broader political backdrop. Not only was EIS extended for a further ten years to 2035, but in the most recent Budget, the investment limits for both EIS and VCTs were doubled, ensuring they are better able to support scaling businesses across the UK.
Wider policy changes around pensions and inheritance tax are likely to have a significant impact on many individuals. In response, advisers are increasingly considering a broader range of solutions, including government schemes like the EIS and SEIS, to help mitigate these effects.
TEI: How healthy does the UK’s seed and early-growth funding ecosystem currently look?
CSL: There is no shortage of entrepreneurial talent or ambition in the UK, and the pipeline of innovative companies remains strong. However, access to capital continues to be a challenge, with tough competition for a limited pool of investment. Most managers I speak to say that deployment is not the issue and that they are seeing far more investable opportunities than they have capacity to fund.
From an investor’s perspective, this means there is a large number of high-quality companies actively seeking capital. Valuations have also come down since the pandemic-era highs, while advances in AI are enabling companies to achieve more with fewer resources. This environment is characterised by strong deal flow, supported by the UK’s world-leading EIS and SEIS.
Alongside an ecosystem that continues to attract exceptional global talent, this underlines the UK’s position as one of the strongest early-stage investment ecosystems globally.
TEI: What is a common misconception about EIS and SEIS that needs challenging?
CSL: There are several, but the most common is the belief that EIS and SEIS are only suitable for UHNWs, with an assumption that six-figure investments are required. The reality is very different; yes, some people do invest six-figures (or even seven-figures) through the schemes each year, and yes, these are high-risk investments, but more than 50% of people investing through the schemes each year invest £10,000 or less.
A number of fund managers now offer SEIS minimums as low as £2,000, where investors can benefit from 50% income tax relief, so investing in early-stage businesses is accessible to a wider audience than people often think. The EIS and SEIS have played an important role in democratising access to this asset class.
Another misconception is that EIS and SEIS are primarily tax-driven products rather than growth-led investments. In reality, the tax reliefs exist to help mitigate some of the inherent risk involved in backing early-stage companies that contribute to innovation, job creation and economic growth. Ultimately, it is about investing in great businesses. 46.5% of UK unicorns were EIS-backed, and many EIS-supported companies have gone on to become household names, including Depop, Zoopla, Childs Farm, Deliveroo, Revolut, Trinny London, Monzo, Charlotte Tilbury and Lucky Saint, among others.
Summing up
This interview really captures the theme of this year’s Tax Efficient Insights report, as advisers navigate rising tax burdens, shifting pension rules and an increasingly complex investment landscape, EIS and SEIS are emerging as more than niche solutions, with early-stage investing playing a growing role in diversified portfolios.
Although EIS and SEIS carry inherent risk, they also offer advisers a powerful way to combine long-term growth potential with meaningful support for the UK’s innovation economy as part of a balanced strategy.
This piece featured in this year’s annual issue of Tax-Efficient Investment (TEI) Insights, which you can read here!
Christiana Stewart-Lockhart
Christiana is Director General of the EIS Association (EISA), the trade body for the Enterprise Investment Scheme (EIS) and the Seed EIS ecosystem. EISA has more than 400 members, including entrepreneurs, advisers and investors using the schemes. Christiana previously spent more than a decade working in Westminster and holds a BA in Politics from the University of York.
She was included on the 2025 Women in Trade Associations Powerlist and is a member of TISA’s Financial Education Council. She also sits on the Advisory Board for the APPG for Entrepreneurship.
