Questions raised over Octopus investment scheme after pensioners’ money exposed to struggling businesses

Questions are being raised about an investment scheme linked to Octopus Investments after money from pensioners and other investors was used to back private businesses and projects that have subsequently faced financial difficulties.

The scheme, known as the Octopus Inheritance Tax Service, allows investors to put money into assets designed to qualify for business relief, potentially reducing inheritance tax liabilities.

Investors hold shares in Fern Trading, a private company established by Octopus co-founder Simon Rogerson. Fern has invested across areas including renewable energy, property and broadband infrastructure.

However, concerns have emerged over the performance and valuation of some of the investments held within the structure.

Recent reporting has highlighted significant losses and financial pressure within parts of Fern's portfolio, including businesses involved in healthcare, care and broadband.

Thousands of investors were reportedly exposed to losses following the collapse of a hospital business backed by the investment structure, raising questions about the risks faced by people who believed they were investing in relatively stable assets for inheritance-tax planning.

Octopus has acknowledged that the investment service has experienced a difficult period.

In its own February 2026 update, the company said performance had not been as expected and acknowledged challenges affecting the value of Fern's shares. It said infrastructure investments were particularly sensitive to interest rates and changing market conditions, while parts of its fibre portfolio had underperformed because of increased competition.

The situation has also prompted questions about how private investments are valued and how investors can access their money.

Unlike shares traded on major stock exchanges, private company investments can be considerably harder to sell quickly, particularly when market conditions are difficult.

Octopus has defended the underlying investment strategy, saying Fern focuses on long-term, asset-backed sectors including renewable energy, real estate and fibre infrastructure.

The company has also said that many of the underlying assets continue to perform and that it is taking steps to address areas of underperformance.

The controversy highlights a wider issue for investors using inheritance-tax investment schemes: tax advantages do not remove investment risk.

People considering such products can face risks including changes in asset values, difficulties selling investments and the possibility that individual businesses or projects perform poorly.

For existing investors, the latest developments are likely to increase scrutiny of how their money is invested, how private assets are valued and what fees are being charged.