Company Sharesave Scheme Opinions
Discussion
I have received an email back last week from my employer which informed me of the impending start of a Sharesave 'SAYE' Scheme.
The scheme will be the lesser 3 year contract (which I believe now gets a 0% bonus), with an options discount of 20%. The company is T Clarke (Electrical Contractors) who's shares have took a hefty tumble recently.
What are peoples opinions on such schemes?
Craig
The scheme will be the lesser 3 year contract (which I believe now gets a 0% bonus), with an options discount of 20%. The company is T Clarke (Electrical Contractors) who's shares have took a hefty tumble recently.
What are peoples opinions on such schemes?
Craig
I work for a worldwide telecommunications company who have been running a scheme like this for years. Once your shares have been in the scheme for 3 years, the company will give you one extra share for every one you have purchased (buy one get one free). Can't go wrong right????
I have been in the scheme for around 3 years and the share price has dropped to a third of what it was 12 months ago.
Looks like it's going to be a long term investment!
I have been in the scheme for around 3 years and the share price has dropped to a third of what it was 12 months ago.
Looks like it's going to be a long term investment!
If the share price falls to 20% lower than the offer price you still get all your money back + interest I assume, nil bonus on 3 year full years is a bit crap.
So if you can afford to deposit the money for 3 years then do it, you'll it get back plus a tiny amount more as a minimum, and if the share price stays still your +20% if it goes up your plus more.
As an employee savings vehicle Company Share Matching plans that are better in the longer term, but these aren't too bad.
So if you can afford to deposit the money for 3 years then do it, you'll it get back plus a tiny amount more as a minimum, and if the share price stays still your +20% if it goes up your plus more.
As an employee savings vehicle Company Share Matching plans that are better in the longer term, but these aren't too bad.
I'm very happy to have invested heavily into my company's 5yr option from 2009 (based on average shareprice which included the 2008 dip) and would echo the advice of the FD who told me to 'invest as much as you can afford to'. Worst case, you get your money back, so you're exposed to a potential high level of reward for a relatively low risk.
Big Worm 1 - I think we work for the same company. I've been saving for 5 years in the scheme now and am trapped. Either take my cash out and forfeit the free shares, pay tax and lose 60% +. Or wait, hope that the price recovers and if i'm lucky i'll break even in the medium term. Its a shame its not the type of scheme where you get the option to buy at the end of the period. They really are win win - even if the price drops you can take out your cash with the addition of a small interest payment.
Share Save is relatively a mid term investment the Share Matching Plan is viewed as a longer term plan and has significant tax breaks.
Firstly you get to invest tax free,
Secondly you get in essence a 50% discount,
Thirdly the shares you buy are income tax free after 3 years,
Fourthly the share the company buy for you are income tax free after 5 years
Fifthly any dividends reinvested into shares are income tax free after 3 years
Both of these plans are designed to get the employee to have a vested interest in the company performing on behalf of their shareholders rather than their day to day stuff as well as creating a retention and wealth creation opportunity.
ShareSave is just a promise with shares being practically a virtual entity, the ShareMatching is real shares with voting rights and dividends so brings with it all those elements as well the risks.
With the ShareMatching, when you do leave you'll have 3 to 5 years of shares on which some tax is due, but seeing as you basically had a 50% discount you at least get what you put in even if your 50% tax bracket payer, unless the share price has gone way south since your purchased them.
Firstly you get to invest tax free,
Secondly you get in essence a 50% discount,
Thirdly the shares you buy are income tax free after 3 years,
Fourthly the share the company buy for you are income tax free after 5 years
Fifthly any dividends reinvested into shares are income tax free after 3 years
Both of these plans are designed to get the employee to have a vested interest in the company performing on behalf of their shareholders rather than their day to day stuff as well as creating a retention and wealth creation opportunity.
ShareSave is just a promise with shares being practically a virtual entity, the ShareMatching is real shares with voting rights and dividends so brings with it all those elements as well the risks.
With the ShareMatching, when you do leave you'll have 3 to 5 years of shares on which some tax is due, but seeing as you basically had a 50% discount you at least get what you put in even if your 50% tax bracket payer, unless the share price has gone way south since your purchased them.
Our annual scheme is under application now.
Foot thing the share price is the lowest it ever has been and then 20% off of that... However a year ago the price was higher and we all said the same it cannot get any worse... Well it did.
This time though I think were in a position of we really cannot go any lower as if we do bank covenants come into play.
So I didn't bother last time but I'll go for the full £250pcm this time but I'm confident it will be over subscribed therefore I'd get maybe £90pcm if I'm lucky.
Why don't the govt increase what you can pay in why restrict it??? Your investing into the company and as a citizen investing fr the future a desirable outcome for the govt.
Foot thing the share price is the lowest it ever has been and then 20% off of that... However a year ago the price was higher and we all said the same it cannot get any worse... Well it did.
This time though I think were in a position of we really cannot go any lower as if we do bank covenants come into play.
So I didn't bother last time but I'll go for the full £250pcm this time but I'm confident it will be over subscribed therefore I'd get maybe £90pcm if I'm lucky.
Why don't the govt increase what you can pay in why restrict it??? Your investing into the company and as a citizen investing fr the future a desirable outcome for the govt.
Welshbeef said:
Why don't the govt increase what you can pay in why restrict it??? Your investing into the company and as a citizen investing fr the future a desirable outcome for the govt.
It's meant to be a low level employee savings & engagement opportunity, if there was no cap the higher paid employees would use it as a cheap (and more PAYE tax efficient for Share Matching) way to get more shares at a cheaper than retail price, and much better than pure share options plans which are liable to CGT on any incremental returns over the limits & option price. They would also probably have to start to also levy CGT on the ShareSave Scheme if the limit was higherGassing Station | Finance | Top of Page | What's New | My Stuff