Sharesave schemes
Discussion
The company I work for have recently merged into a much larger international.
They offer a sharesave scheme, something which I have to admit I've never dealt with before.
The details I've gleaned so far is that for every £1 you put in the company also adds another £1 (so you hand over £1 for the equivalent of £2 in shares), the shares mature after 3 years and maximum per month is about £125 or so.
Are these generally a good method of saving? Obviously the doubling of the sum by the company sounds good but in practice does that just offset any tax you might pay withdrawing money?
The companies share prices have been pretty rock steady for the last 10 years give or take a slight deviation they seem to have neither dropped nor raised by any meaningful amount. I'm just wondering if it might be a better place long term for some savings rather than the usual ISA or pitiful savings accounts available.
They offer a sharesave scheme, something which I have to admit I've never dealt with before.
The details I've gleaned so far is that for every £1 you put in the company also adds another £1 (so you hand over £1 for the equivalent of £2 in shares), the shares mature after 3 years and maximum per month is about £125 or so.
Are these generally a good method of saving? Obviously the doubling of the sum by the company sounds good but in practice does that just offset any tax you might pay withdrawing money?
The companies share prices have been pretty rock steady for the last 10 years give or take a slight deviation they seem to have neither dropped nor raised by any meaningful amount. I'm just wondering if it might be a better place long term for some savings rather than the usual ISA or pitiful savings accounts available.
Is it an option to buy shares or do you HAVE to buy shares at the end of the three year period?
My daughter is in a scheme where she saves for 3 years and at the end she has options to buy shares at a certain price. Best case scenario -she buys the shares and sells them immediately for a whacking profit. Worst case scenario - the share price falls below the offer price in which case she doesn't exercise the option and gets back the money she's saved.
My daughter is in a scheme where she saves for 3 years and at the end she has options to buy shares at a certain price. Best case scenario -she buys the shares and sells them immediately for a whacking profit. Worst case scenario - the share price falls below the offer price in which case she doesn't exercise the option and gets back the money she's saved.
What you've describe sounds like our share purchase scheme - you can use up to £125pm or your pre-tax salary to buy shares and the company will add a further £30pm. If you're a higher rate tax payer then you get £155 worth of shares for less than £75. The downside is that the shares cannot be sold immediatly and have to be held for a period. The upside is that they are held in a trust and are free from any tax whilst they are in the trust (including CGT).
My company also offer somethign called "Sharesave". This is a maximum of £250pm for three years. At the beginning the share price of the deal is set (usually at a 20% discount to the current price). At the end you have a choice of taking your money back or buying the shares at the price set three years ago. The downside is that the money is taken outside of tax/NI and you could be subject to CGT when you dispose of the shares. The upside is that you get a three year ITM option for the opportunity cost of £250 per month and the interest you would have earned on that cash.
Both schemes are very good and I encorage my team to participate if they can afford it.
My company also offer somethign called "Sharesave". This is a maximum of £250pm for three years. At the beginning the share price of the deal is set (usually at a 20% discount to the current price). At the end you have a choice of taking your money back or buying the shares at the price set three years ago. The downside is that the money is taken outside of tax/NI and you could be subject to CGT when you dispose of the shares. The upside is that you get a three year ITM option for the opportunity cost of £250 per month and the interest you would have earned on that cash.
Both schemes are very good and I encorage my team to participate if they can afford it.
As you will have realized by now from the above, these schemes are pretty much an excellent way to make some money.
But do sell the shares before your employer crumbles to dust.
I had amassed quite a few shares in my then employer (a dodgy Scottish bank (whose initials can be found (somewhat appropriately) somewhere in the word "rubbish")) but failed to sell many of them before the bank became a worthless piece of s
t.
Hope this helps.
But do sell the shares before your employer crumbles to dust.
I had amassed quite a few shares in my then employer (a dodgy Scottish bank (whose initials can be found (somewhat appropriately) somewhere in the word "rubbish")) but failed to sell many of them before the bank became a worthless piece of s
t.Hope this helps.
Cliftonite said:
As you will have realized by now from the above, these schemes are pretty much an excellent way to make some money.
But do sell the shares before your employer crumbles to dust.
I had amassed quite a few shares in my then employer (a dodgy Scottish bank (whose initials can be found (somewhat appropriately) somewhere in the word "rubbish")) but failed to sell many of them before the bank became a worthless piece of st.
Hope this helps.
Thanks to the everyone for experiences/advice and views etc. But do sell the shares before your employer crumbles to dust.
I had amassed quite a few shares in my then employer (a dodgy Scottish bank (whose initials can be found (somewhat appropriately) somewhere in the word "rubbish")) but failed to sell many of them before the bank became a worthless piece of s
t.Hope this helps.
Luckily it isn't a bank so fairly confidant, as much as one can be that it's not going to crumble . I won't be putting everthing in one basket but hopefully it be a useful sideline for savings along with what I have already.Similar to the above, I paid into a Share purchase scheme (buying £125 of shares per month, which is then matched by the company). It looked like a total no-brainer at the time (pre-recession).
Several years later, the shares a quarter of there highest values, and I am pretty sure I have made a loss. I'm now leaving the company as well so am losing some "matching shares".
(large foreign owned energy company if you are wondering)
In summary, great way to make money, if the shares don't plummit, and you stay with the company.
Several years later, the shares a quarter of there highest values, and I am pretty sure I have made a loss. I'm now leaving the company as well so am losing some "matching shares".
(large foreign owned energy company if you are wondering)
In summary, great way to make money, if the shares don't plummit, and you stay with the company.
I'm in one, £125 a month from pre tax earnings, so there's a saving there straight away, plus they match your contributions 1 for 1 for the first £63
currently sitting at over 300% profit with todays share price, though I can't sell them yet without losing the bonuses, and dividends are netting £1k a year in extra shares, the profit does include some free shares given as bonuses.
Guess it all depends on how much you trust your company not to go under, but when it comes out of your pre tax pay, you don't notice it go anyway, so it's an easy way to save if you're one of theose people who spends everything you get every month
we used to have the system where you saved money and had an option to either buy the shares at a set discounted price at the end, or take the money, but this scheme you buy the shares immediately and they are held in trust
currently sitting at over 300% profit with todays share price, though I can't sell them yet without losing the bonuses, and dividends are netting £1k a year in extra shares, the profit does include some free shares given as bonuses.
Guess it all depends on how much you trust your company not to go under, but when it comes out of your pre tax pay, you don't notice it go anyway, so it's an easy way to save if you're one of theose people who spends everything you get every month
we used to have the system where you saved money and had an option to either buy the shares at a set discounted price at the end, or take the money, but this scheme you buy the shares immediately and they are held in trust
Edited by motorizer on Monday 18th March 17:16
Edited by motorizer on Monday 18th March 17:18
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