Sharesave advise needed

RobLondon1984

I though I post this here, so I can get more replies.

I received the sharesave booklet on Monday and was thinking of joining. I was thinking of investing £20/month for 3 years. If shares are £3.04 on March 2015, I would make a profit of around £200. I can only make money if share prices goes up, as there is no interest or bonus for investing.

If I invest £20/month in a ISA account, the highest rate I could get is 2.8%, I would make a profit of around £32 on March 2015.

Sounds good to invest in sharesave, but I am worry that I would get fired or decide to quit the job and that I won't be able to get my money back. I should, as the booklet says, even if you leave, you get the amount you invested. I don't mind losing out on the £32, as it isn't a lot of money.

If the sharesave was one year long, I would definitely apply, but three years is a long time.

Should I invest or not? Thanks

MoneySaverLog

Depends on if you're staying for the 3 years, if you are then it's a good bet as you get your money back whatever happens, but get the option to buy in 3 years time for what they are worth now, probably reduced too to 80% of the market value.

It's what they call a no brainer!

RobLondon1984

It isn't a no brainer, as share prices can go down as well as up.

Also, I might get fired, or get another job. Which means I won't make any money for my investment, hence why I am only thinking of investing £20/month.

However, you can make a lot of money if you invest a lot, and share price increases a lot.

ffacoffipawb

RobLondon1984 wrote: »

It isn't a no brainer, as share prices can go down as well as up.

Also, I might get fired, or get another job. Which means I won't make any money for my investment, hence why I am only thinking of investing £20/month.

However, you can make a lot of money if you invest a lot, and share price increases a lot.

It is a no brainer - if the share price is below the option price, you don't have to buy them, you can get your money back.

Same if you leave. In fact, if you are made redundant you can still exercise the option (when you leave, but only with the funds accumulated so far). You can carry on paying money in, but the option is then forfeit so its just a savings scheme with no interest, so no point in doing that.

If you leave of your own accord, you just get your money back.

opinions4u

Heads you win. Potentially a lot.

Tails you get your money back. Just without the interest.

If the share price sinks, you don't have to buy them. In fact, you can wait for up to six months at the end of the term for the share price to recover and then make your decision.

If you can safely afford to, pile in the full £250!

ses6jwg

Sharesaves are always worth it.

It's a chance to make big bucks on shares without any of the risks normally associated with buying them.

MoneySaverLog

I agree with all the comments, just waiting for mine to drop on the doormat, but suspect option price will be on the high side at the moment for National Grid so will have to think about it when the offer turns up in the post as it usually does around this time of year.

agrinnall

They are worth it unless you exercise the option to buy and after that the shares plummet - I was lucky to escape that fate with RBS shares by leaving before I was able to exercise the option, instead getting my money back plus a healthy bonus for being in a 5 year scheme.

financial_illiterate

opinions4u wrote: »

Heads you win. Potentially a lot.

Tails you get your money back. Just without the interest.

If the share price sinks, you don't have to buy them. In fact, you can wait for up to six months at the end of the term for the share price to recover and then make your decision.

If you can safely afford to, pile in the full £250!

The offer price might be lower next year!

If you're with the company for the long haul, its surely better to invest in stages? If this year's offer is the best ever then the full amount might make sense, but otherwise I'd say do fifty a month every year and eventually have a nice pot mature every year.

If your goals are more medium term then do an intermediate amount in either three or five year schemes.

If you're not anticipating being with the firm for three years or more, I wouldn't even bother though.

financial_illiterate

agrinnall wrote: »

They are worth it unless you exercise the option to buy and after that the shares plummet - I was lucky to escape that fate with RBS shares by leaving before I was able to exercise the option, instead getting my money back plus a healthy bonus for being in a 5 year scheme.

The share save doesn't carry that risk though, its only when you exercise the right to buy and become a shareholder you're at mercy of the stock market.

Btw, I think the healthy five year bonuses have dried up, I believe they're linked to the base rate?

chris_m

financial_illiterate wrote: »

Btw, I think the healthy five year bonuses have dried up, I believe they're linked to the base rate?

I think they must be, the last few with my company have had lower and lower bonuses.
Dunno what this year's one is - I'm maxed out on the previous two schemes until next July IIRC when the 3-year one I've got running matures - so I didn't bother even looking.
There's no way the option is more advantageous that the ones that are running, and we can't stop one early to free up saving entitlement for a later scheme anyway.