Savings Related Share Option Scheme

jimjames

madkingsoup wrote: »

And suddenly I see why it's not worth it. Ours isn't discounted, and the dividends are pennies.

Pennies might be significant if the share prices is also pennies! Even a 2p dividend on a £1 share is as good as you'll get in the bank!

I guess it does really depend on the company. If it was Comet then you might be right but even if it is a basket case company you know that you are guaranteed your money back. You certainly wouldnt get that if you invested directly in the shares!

somethingcorporate

Some of the gains could be amazing - those in my company that have just matured after 3 years at £250pm subscription have made tens of thousands in profit due to the increase in share price (trebled in that time).

I have subscribed to a couple, if they mature at the current share price my gain would have been about £2k per scheme, not bad return on a £5k investment and far better than had I put it in the bank.

markwilkinson

I would still go for it, if helps your nerves then how about just going with the minimum allowed?

MoneySaverLog

Heads you win and tales you take your money back it's a no brainer given interest rates at the moment. Pile in the max if you can :-)

sabretoothtigger

Its a free share option. These are worth money even at 0% interest, to buy options costs something normally. Think of it like free insurance, if you never claim its still worth something to get that cover free

Admittedly if your company is a pile of crud then its not as attractive. Its done to encourage employee interest in sucess of their own companies I think Anyone remember the old PCP scheme I think it was called, profit share pay free of tax

frales

Check out my post today on share schemes. As said it is a no brainer.

frales

Hi

Because of the financial crisis since 2007 my Financial Advisor has advised me to put money into premium bonds!! This is a guy who advised me to invest in a share ISA which crashed leaving me £3000 pounds down. I did not need the money so left it alone. It has taken five years for my investment to get back to the original amount. Now in that five years I may have won the premium bonds, (I didn't) but the money I paid in premium bonds is still all there. Granted it has not increased but I haven't lost anything either. On share schemes my experience has been very good. I have either made loads of money or got back what I put in plus a bonus. The bonus is a lot more than I would have earned in interest in any high interest account.

So I would always advise to take advantage of a share scheme. Most shares will go up but if they don't you still get your capital back.

StephenM_2

We have a different type of share scheme called a Share Incentive Plan.

Under this we can buy shares worth up to £1500 a year free of tax and national insurance, so the net cost is quite a bit less than £1500. We also get bonus shares worth 15% of our gross contribution, and dividends are re-invested.

The snag is we get allocated the shares immediately, rather than via an option, but can't sell them for 5 years without taking a tax and NI hit. So its riskier than a SAYE scheme.

Anyway, I've been in the scheme since it started. Haven't sold any shares yet since I've got very few that are old enough to take tax free, but I worked out that for a net cost of about £6k, my shares are currently worth about £12k. That's a lot better than a cash ISA

sabretoothtigger

Which share are you buying, nobody ever mentions this ?

It could be a Fiji gold mine, it might be UK water utility they cant really be compared

invest in a share ISA

Without knowing which shares, it is pin the tail on the donkey as investment strategy I'd favour premium bonds over that

Except for the last post, share scheme as an optional purchase is much lower risk so much better if not wanting open ended risk. It can still lose money via inflation but thats the same as any savings

http://www.investopedia.com/terms/l/limitedrisk.asp