Save as you earn

Carnival789

I’m about to join my first “Save As You Earn” scheme (I think that’s what its called – when you buy shares each month) with my new employer and am considering an “all-in-at-once” tactic – by which I mean contributing the full £500 per month into this year’s scheme. Not because I have £500 a month spare from my income, but more as a way of drip-feeding in money from my savings.



If I decide not to buy shares at the end of the 3 years, I see that I will get my money back but WITHOUT any interest added.



I have worked out that if I just left the money where it is (Santander 123) I will miss out on around £650 worth of interest (more if the Tories get in and abolish tax on the first £1k of interest earned).

This is quite a lot of money to potentially fore-go and I guess it just boils down to how happy I am to take the risk of losing this interest in comparison to the potential rewards on offer by my company maintaining a healthy share price.



However, I wondered if anyone here had ever adopted the “all-in-at-once” tactic and whether you would do it again?

martinsurrey

I have and would definetly do it agian,

at the end of the day, do you tihnk your company shares are overpriced?

What discount are your employers offering, mine are at 20% discount to market price at date of grant (247p) and are currently trading at (440p) giving me an effective interest rate of 40% which will be subject to CGT (so tax free for me).

as long as you are getting a good discount, and you dont expect the company to tank, go for it.

Minrich

I think if you do it for 5 years most companies give you a bones ... We have done it for 15 years with Tesco . This years price was £1.50 and we are investing £500pm . The advantage of this scheme is that if the shares are less than the offer price at maturity you can just take the cash . Its a no brainer at present interest rates imho

shop-to-drop

It's down to you but the risk is low as it it just a loss of interest and not capital. You never know if it will pay off. DH and I do them and have both had many years where we just took the cash back or stopped it mid way as the new year offer was better. But gains can be very large DH has one maturing in May where he buys shares at £2 and should be able to sell them for £8.75-£9.00.

In my opinion I think you should go for it, if you change your mind later you can always cancel and get your money back. Also you don't need to drain your savings altogether you can save some from your income too.