Concerns about Tesco SAYE scheme

JPM39

Ok, almost three years ago I enrolled in a save as you earn scheme with Tesco. It was for 3 yrs and at £50 per 4wks (out of pay). The term is almost up, and my SAYE plan on Equiniti Portal is showing as £1800. Sounds right for the £600 paid in each yr X 3yrs. What concerns me is two things. I was aware at the time of starting this, that shares could go up or down, and in this instance the current share price has dropped below the option price, making selling the shares an absolute no-no. Ok , so this can't be helped, but what about if you didn't want to purchase the shares and just take the cash? There is supposed to be a bonus, but on my plan it is showing as 0.3 rate which basically means I can get £1815 back. So I've invested with SAYE for 3 yrs to make a gain of 15 quid????!!! Surely this can't be right. At the time I took it out I calculated that it would be in the region of about £150 as the bonus on top of the £1800.

McKneff

Are you sure it was every 4 weeks and not per month.

So did yu pay in 13 time £50 ie 4 weekly

Or were you paid monthly ie 12 times a year. So 12 x £50

The difference ove the year is only £50 but its your £50

YorkshireBoy

McKneff wrote: »

Are you sure it was every 4 weeks and not per month.

The Tesco SAYE scheme is 4 weekly, with the last payment being made around the October prior to exercising in February.

OP, here's a HMRC table showing the bonus rates applicable per scheme start date...

http://www.hmrc.gov.uk/shareschemes/historical-bonus-rates.pdf

Tesco would have made it very clear, and continue to do so each year, what the interest rate applicable is (derived from the 'monthly payment multiple' figure) when you started the scheme, should you decide to take the cash instead.

BTW, it's HMRC that are the decision-makers here...not your employer.

JPM39

YorkshireBoy wrote: »

The Tesco SAYE scheme is 4 weekly, with the last payment being made around the October prior to exercising in February.

Yes this is what it showed, the last payment was supposed to be around October, and it worked out that you would get £1800 back I think so the bonus could be already built into it then, if payments stop 3 months or so before the 3yrs is up. Do they? In other words do you pay in, for something like 2.75 yrs and get back 3yrs worth of savings?

YorkshireBoy

You make 36 x 4 weekly payments.

The final year's (of a 3 year scheme) October to January 'payment holiday' (of 12 weeks, or 3 x 4-weekly pay periods) is the result of only paying in for 48 (rather than 52) weeks per year.

I'm not a Tesco employee (just know someone who is), but all this is explained in your scheme booklet.

I have some more bad news for you...just in case you didn't spot it in the pdf document above, if you also participated in the scheme years since this one started your 'interest rate' for cash instead is a very round 0.00%.

markwilkinson

JPM39 wrote: »

YorkshireBoy wrote: »

The Tesco SAYE scheme is 4 weekly, with the last payment being made around the October prior to exercising in February.

Yes this is what it showed, the last payment was supposed to be around October, and it worked out that you would get £1800 back I think so the bonus could be already built into it then, if payments stop 3 months or so before the 3yrs is up. Do they? In other words do you pay in, for something like 2.75 yrs and get back 3yrs worth of savings?

I think you pay in the full amount.

I believe the Govt stopped the tax free bonus a couple of years ago but I'm not sure if that was back dated or not.

Lots of people on here think that these SAYE schemes are a no brainer, I agree. You havnt really gained anything from yours though. You do have options though. Tesco arnt a bad share to hold, so whilst you havnt made anything in the way you expected when you started the scheme, you can still convert your £1800 into shares. Tesco pay a dividend and the share price may still rise (Tesco are suffering at the moment as consumers don't trust them), if they can turn that around, you could be in profit in the future.

JPM39

I wanted to cash in some shares anyway. I hold quite a large amount, and would have loved to have shifted the lot when they were around £4.50 odd. Even at £3.24 per share (2nd Nov price) I may be forced into selling some as I have had a dentist bill at £250 turn into more complex treatment and will now be £640!

YorkshireBoy

markwilkinson wrote: »

I believe the Govt stopped the tax free bonus a couple of years ago but I'm not sure if that was back dated or not.

It wasn't. See the text at the top of the table in my earlier HMRC link.

Cuckooclock

If you want to see the ups & down of Tesco shares over the last years, up to 10.
Go to the Tesco site click on Tesco plc right at the bottom of the page, click on the share price, the 2nd tab will show a chart of the performance.
There is a lot of other information on this page too.