company saving scheme

naughtybish

I work for Skanska construction. ( built the London Gurkin etc )

and we have been offered one og=f these 5 year schemes in which you put away
X amount each month and then in 5 years when it matures you can buy Skanska shares
at a discount rate.

thats if the price in meantime doesnt drop too far

now i know we have some large projects that will be going ahead around the world
as well as some PFI contracts and work in the capital in the UK.

what are others views on these type of scemes ? are they something new ?

thanks
Bish;)

danny69

Do it - you cant lose money. If the shares fall and are struggling in a few years, you can always get all your money back. After 5 years you either get your money back (with a peppercorn interest rate) or you buy the shares and sell them immediately for a quick profit. Only put in what you can afford though, because 5 years is a long time. The one im in at the moment is 3 years long, and when I was off sick in hospital I struggled because of the contributions I made to the scheme. Also what you can do is that if the shares are worth less than your exercise price, you can take a payment holiday for upto 6 months. You should take this with a month to go if the price isnt favourable. You can then wait and hope the price rises.

Stewster

danny69 wrote: »

Do it - you cant lose money. If the shares fall and are struggling in a few years, you can always get all your money back. After 5 years you either get your money back (with a peppercorn interest rate) or you buy the shares and sell them immediately for a quick profit. Only put in what you can afford though, because 5 years is a long time. The one im in at the moment is 3 years long, and when I was off sick in hospital I struggled because of the contributions I made to the scheme. Also what you can do is that if the shares are worth less than your exercise price, you can take a payment holiday for upto 6 months. You should take this with a month to go if the price isnt favourable. You can then wait and hope the price rises.

Completely agree with you danny69. You can't loose with these schemes. I work for a large multinational and the scheme they operate allows me to even wait up to 6 months after the option matures in which I can exercise the option. I would suggest doing one every year if you can as then you get a rolling payment every year - admitedly it is a long wait (either 3 or 5 years or whatever length the schem is) till you get your first return but after that its all good. These schemes are a brilliant way to save directly from your salary and some schemes even take the contributions from your pre-tax salary. - although these are slightly different in nature and come with different conditions.:beer:

JCB2020

I concur with the previous comments.
My company has offered these for a few years now.
Participated in two previous schemes and made money!
Currently in a 3 years plan with two to go.

We are only allowed to join one scheme at any one time with a £250 max/month.

Good tax free way to save.

bjorn_again

naughtybish wrote: »

I work for Skanska construction. ( built the London Gurkin etc )

and we have been offered one og=f these 5 year schemes in which you put away
X amount each month and then in 5 years when it matures you can buy Skanska shares
at a discount rate.

thats if the price in meantime doesnt drop too far

now i know we have some large projects that will be going ahead around the world
as well as some PFI contracts and work in the capital in the UK.

what are others views on these type of scemes ? are they something new ?

thanks
Bish;)

These are not new schemes. I completed a 3 year one in March of this year. I would have subscribed to the next version except I shall be retiring soon and don't expect to be with them in three years time. Basically my Company (Wincanton) deducts a monthly sum from my salary and at the end of the term I have the option of withdrawing my cash with a bonus, or buing Wincanton shares at the price they were at the start of the 3 years. I sold my shares immediately and made a nice profit.

ginvzt

Do it! Both my and OH joined these schemes at our companies. I have an option to joined the scheme every year both 3 and/or 5 year options, as long as the total amount paid in each month is less than £250. The stock price is fixed at 20% less than the price on a specific day, for both our companies. With all the turmoil, my companies shares are down at the moment, less than the exercise price, but I still have a couple of years to go! If it won't pick up, I'll just get my cash back plus bonus, which is 2.4 monthly payments for 3-year plan, or 7 monthly payments for 5-year plan. This is equivalent to 4.23% (4.36% for 5 years) tax free interest, not bad, especially in the current climate.

Stewster

JCB2020 wrote: »

I concur with the previous comments.
My company has offered these for a few years now.
Participated in two previous schemes and made money!
Currently in a 3 years plan with two to go.

We are only allowed to join one scheme at any one time with a £250 max/month.

Good tax free way to save.

Its not necessarily tax free - you need to check the terms of your scheme. I have two different schemes that I subscribe to with my employer - one is the traditional sharesave where you get granted the options to buy shares at the end of 3 or 5 years. The subscruiptions to this scheme come out of my post tax salary.

The other scheme I subscribe to is basically a tax free option to buy shares. This works differently by the monthly subscriptions I make being used to buy shares on a monthly basis. These shares are held in trust for me until I ask for them to be sold or transferred to my name. This one is tax free as it comes from my pre-tax salary. The downside to this though is that you pay the market price every month and if you sell the shares within 5 years you are liable for income tax and national insurance that you avoided by buying the shares in the first place. The upside for this sort of scheme is that you effectively gain - even as a basic rate taxpayer - by avoiding paying tax +NI on the contributions.

ginvzt

When I said tax free in my post, I meant you don't pay tax on the savings as you usually do with a savings account - you still put money in it from your salary after you paid tax, and they still take a share of 20% or 40% on the interest. With the sharesave, you don't pay the second part of the tax.

Should we call it semi-taxfree?

Stewster

ginvzt wrote: »

When I said tax free in my post, I meant you don't pay tax on the savings as you usually do with a savings account - you still put money in it from your salary after you paid tax, and they still take a share of 20% or 40% on the interest. With the sharesave, you don't pay the second part of the tax.

Should we call it semi-taxfree?

Sounds fair enough to me

leviathan

What happens to the money in the scheme if the company goes under?
Who is the administrator?

ginvzt

As far as I know I have an account with Yorkshire Building Society in my name were the money goes. If company goes bust, the account is in my name...