RBS Sharesave 2011 - advice? thoughts?

gadgetmind

FireBurn wrote: »

And what would you recommend with the cash I get back? Mortgage pay off, cash ISA, shares ISA or an investment thing like Zopa?

Anything other than banking shares.

chris_m

opinions4u wrote: »

You can pay in to as many as you like, but the overall contribtion should not exceed £250 per month.
See page 8
http://www.hmrc.gov.uk/shareschemes/employer-guidance.pdf

Another thing to bear in mind is that if you stop a scheme early and take the accrued cash/interest, the contribution amount still counts towards the £250/month until that scheme matures.

That change came in a couple of years ago, previously you could stop a scheme and start a new one (if, say, the option price was better) using the same contributions, now you can't.

Jegersmart

FireBurn wrote: »

And what would you recommend with the cash I get back? Mortgage pay off, cash ISA, shares ISA or an investment thing like Zopa?

Well, IF you are scaled back - which I guess is not certain at this stage - then this would need to be a decision you make yourself depending on your circumstances. If you have a mortgage at near 5% then maybe just overpay if you have that facility or if your mortgage rate is very low and guaranteed to continue at a very low level then you *could* look at other ways to get more out of it and then pay that off when the rate rises in the future.

Very difficult to judge without knowing your complete portfolio of debt and savings/investments - and I would suggest that it is not necessarily the place to do on here...?

As I said, this is just my opinion - it is quite complex - a 27% improvement in strike price but what if you get scaled back by 50%? Well then we have to guess what the share price might be in 5 years time which would be impossible ofc.As long as you do something with any scale back money then I think thats what I would do....fwiw...:D

Jegersmart

gadgetmind wrote: »

I've been scaled back on two of the six of these I've started.

I defer to your greater experience without hesitation

Jegersmart

chris_m wrote: »

Another thing to bear in mind is that if you stop a scheme early and take the accrued cash/interest, the contribution amount still counts towards the £250/month until that scheme matures.

That change came in a couple of years ago, previously you could stop a scheme and start a new one (if, say, the option price was better) using the same contributions, now you can't.

well then this is a moot point - and I declare myself out of a discussion that I am clearly "out of date" on.....:)

Good luck!

chris_m

Jegersmart wrote: »

Originally Posted by gadgetmind
I've been scaled back on two of the six of these I've started.

I defer to your greater experience without hesitation

I have been as well - mind you, it was the last time that people could close an earlier scheme and still contribute the same amount to a new scheme and the option price was extremely (*) tempting.
I suspect most of the company went for as much as they could and it was just too much overall so they cut us down 10%.

(*) Even after the carnage on the markets last week, it will still be very lucrative.

gadgetmind

chris_m wrote: »

That change came in a couple of years ago, previously you could stop a scheme and start a new one (if, say, the option price was better) using the same contributions, now you can't.

Coo, I didn't know that. Thanks!

Jegersmart

gadgetmind wrote: »

Coo, I didn't know that. Thanks!

But one can cash in, buy shares at 27p today and then stick £250 per month into an S&S ISA for the next 5 years. Might be worth it if you are up for the somewhat higher risk?

gadgetmind

Jegersmart wrote: »

But one can cash in, buy shares at 27p today and then stick £250 per month into an S&S ISA for the next 5 years. Might be worth it if you are up for the somewhat higher risk?

Somewhat higher? Sharesave is as close as you can get to zero risk while still having a good chance of upside.

When I've shot sharesave schemes, I have invested the money, but not in the same shares as the scheme as I crave diversity.

UoTegne

chris_m wrote: »

That change came in a couple of years ago, previously you could stop a scheme and start a new one (if, say, the option price was better) using the same contributions, now you can't.

Just to be clear does this mean that because my wife is currently paying the maximum £250/month this means if she were to cancel her current scheme she won't be able to start paying into a new one on September 2nd at the better option price?