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Royal Mail Shares

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  • IronWolf
    IronWolf Posts: 6,445 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Absolutely that is the way that I value it, by comparing it to buying an annuity. I am in the teachers pension fund, even though my contributions would have gone up from 6.4% to about 12% next year (currently 10.1%) it is still great value. I work part time but still earn £686 pension each year for a contribution (next year at 12%) of £4,957. I value that £686 at £20,580 because it also has inflation protection and partner rights and a guarantee, and looking at annuities I reckon a factor of 30 is appropriate. The gain is £20,580 less £4,957 = a pension benefit of £15,623 (38% of my salary).

    Still doesnt beat my 3.5% contributions going up to 6% :p

    I think I worked out once that it is the equivalent of another £5-10k per year in salary all going into a pension, and matched by the employer.
    Faith, hope, charity, these three; but the greatest of these is charity.
  • Yorksport
    Yorksport Posts: 61 Forumite
    buffman wrote: »
    In order to maximise the number of shares allocated, does anyone have any idea the best amount to go for? Ideally I would like to end up with about £10k. Both my wife and I will be applying. If I ask for too many shares, there is a danger of ending up with nothing if the government favours smaller shareholders.

    How long's a piece of string? Judging by press reports, it looks like the issue will be heavily oversubscribed so there will be scaling back. I'm sure they'll want to spread ownership so I doubt if anyone who applies will get nothing and, equally, they will want to keep as much money as they can so may well use previous models and allow every applicant say £2,000 worth, equivalent to what the employees get free, and then a reducing proportion of what they apply for over that amount. If it's massively oversubscribed, everyone may get a maximum of £2,000 worth.
  • marathonic
    marathonic Posts: 1,786 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Yorksport wrote: »
    If it's massively oversubscribed, everyone may get a maximum of £2,000 worth.

    This sounds like what may happen.

    If the government sell too cheap and shares rocket, the public (who haven't bought) will uproar about selling off state assets too cheaply.

    If the government sell too expensively and Joe Public has ploughed his £20,000 life savings into the shares and they subsequently plummet, the media will be all over it.

    The best thing they can do is price them at the higher end of what would represent good value to get a good price, but allocate small amounts per investor to ensure that noone 'loses their shirt'.
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    I've gone for £2k each for me+wife.

    Crystal ball cloudy!
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • Glen_Clark
    Glen_Clark Posts: 4,397 Forumite
    edited 1 October 2013 at 6:32PM
    Yesterday I applied for £8k worth on their website https://www.gov.uk/royalmailshares (paying by debit card for certificated shares)
    My crystal ball is cloudy too, I just did it for some diversification.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
  • Basil74
    Basil74 Posts: 65 Forumite
    I've applied for £7k and as an employee I'm supposed to get preference, I hope so as I'll be rather disappointed if I only end up with £2k.. hardly seems worth the bother.
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Basil74 wrote: »
    hardly seems worth the bother.

    Only time will tell and not bothering was an option.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • Glen_Clark
    Glen_Clark Posts: 4,397 Forumite
    edited 2 October 2013 at 6:20AM
    The private sector cannot afford to pay public sector pensions, so if RM is to be privatized then the oft quoted 'Nationalizing the losses and Privatizing the profits' is the only safe option for RM employees. Royal Mail clearly does not earn enough money to pay its public sector pensions liability. The only people who might have bought RM with the pensions liability attached would have been asset strippers who would have bought it for a pittance, stripped its assets, and then defaulted on its debts like Rover cars.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Glen_Clark wrote: »
    The private sector cannot afford to pay public sector pensions.

    Neither, if we're being honest, can the public sector!
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    Basil74 wrote: »
    I've applied for £7k and as an employee I'm supposed to get preference, I hope so as I'll be rather disappointed if I only end up with £2k.. hardly seems worth the bother.

    somewhat fits the public sector stereotype : overpaid and with an entitlement complex.
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