rbs sharesave 08/09

sabretoothtigger

No profits to share I'd say

anna42hmr

Kavanne wrote: »

There's no profit share this year, is there?

apparently not, but i think they were confirming if that was the case sometime this month

Sillychuckie

I don't quite follow all this.
Is this as risk free as you are making it sound?

I pay some money in regularly and get the option of buying shares at maturity, for 0.38p.
If the share price is 10p, or 0.... I still get all my money back, at the rate of 4.2% tax free!

This sounds to good to be true. What is the catch?
As a high rate tax payer, I'm happy with 4.2% tax free irrespective of the option bonus...
But then with the ability to buy shares for 0.38p on top of that?

Please clarify. I'll try to read up on it tonight - only just got access to the online plan website thingy.
SC.

Kavanne

It's actually only 2.67% AER for the 3 yrs option I think... from what I read on the intranet today anyway

opinions4u

Kavanne wrote: »

It's actually only 2.67% AER for the 3 yrs option I think... from what I read on the intranet today anyway

My fault the 4.2%ish figure. Must date back to an old plan with a different bank!;)

The only elements of risk in Sharesave schemes are:

1) You might be able to get a higher return than, for example, 2.67%, by saving elsewhere.
2) The moment you exercise your options, you are a holder of shares and all the associated risks kick in.

But at least for (2) you can sell quick to maximise personal profits.

Sillychuckie

Yes, you are right.
2.67% for 3 year, 3.04% on 5 year, and 3.20% on 7 year.
However, with that being tax free (and me being a 40% payer), thats really:
4.45%, 5.07% and 5.33% equivalent to an advertised AER rate today.

So if you look at it like that way, there is no real risk at present.
The only risks I see are:

- You do not exercise option and are left with the rates described above.
This is a risk if interest rates rocket, and savings accounts pay much higher.
- You leave employment prior to 3 years and are not allowed to exercise option, even if it is favourible. You just get your money back at 2% interest.

Seems like a win win to me.
I'll read over it again, but im quite tempted to do the 5 year one, at 250pm.

Another nice tip is that you can extend the period by another 6 months, by 'pausing' your contributions.
If you are approaching maturity and you think things will be more favourible even further on, suspend for the 6 months and then exercise.
SC.

Kavanne

I read something on the intranet today saying that if demand was too high they would 'scale' back everyones allowance....

anna42hmr

Kavanne wrote: »

I read something on the intranet today saying that if demand was too high they would 'scale' back everyones allowance....

thats strange theres nothing on there about that today??? on any of the messages ref sharesave. infact they are pointing out how easy it is to cancel existing running ones presumably so people can cancel to increase the allowance for this one as max £250 per month across all current plans

Kavanne

anna42hmr wrote: »

thats strange theres nothing on there about that today??? on any of the messages ref sharesave. infact they are pointing out how easy it is to cancel existing running ones presumably so people can cancel to increase the allowance for this one as max £250 per month across all current plans

It's not on the messages, I found it on some kind of Sharesave FAQ.. I can't remember where I found it. Sorry

anna42hmr

Kavanne wrote: »

It's not on the messages, I found it on some kind of Sharesave FAQ.. I can't remember where I found it. Sorry

ok thanks i didnt realise that