Are employee share schemes worth it?

Flobberchops

I'm enrolled in both my company sharepurchase scheme and sharesave (stock option) scheme, and the sharepurchase is great. Shares are matched after 3 years and become tax-free after 5, and are a pre-tax salary sacrifice, so each month I get the future equivalent of £100 of shares for only a £37 hit to take-home pay. You'd be hard pressed to get a better deal through any other channels.

The only down side is that it's very poor from a diversification point of view: if my company goes belly-up I'll be out of a job AND my shares will be worthless.

theredrose

I've had them in the past and always done well out of them. If one's available to you then consider joining it, if in doubt then don't go all-in i.e. limit your savings amount and perhaps top it up each year. If you get to the point where you have one maturing each year, that's a welcome bonus each year!

MallyGirl

Anonymous101 wrote: »

As other have said it very much depends on the scheme.

My company offers a 3 year saving scheme through YBS that at the end of the 3 year term allows you to buy at an option price of 20% discount on the share price the day before the start of the 3 year term. If you decide not to purchase you receive your savings back in full.
The risk therefore is the potential loss of growth on the investment you could have earned within the 3 years.

My company offers this type. The first time my £9k worth of save bought £22.5k of shares after 3 years and I had to transfer some shares to my husband to avoid CGT. The second time wasn't as good but £9k still got me £13.7k of shares which was 53% growth. I will be doing it again when the next one is offered.

Previn

Worth bearing in mind you can close a sharesave account at any time & get all your money back.
I paid into a 5 year plan which I closed within a year when the share price dropped & was able to opt into the new invite at a much better price (ended up with around 150% profit on that one). May depend if your employer would allow this though.

Share Incentive plans are not as risk free but are likely due to be much more rewarding if they're offered. Employer paid for 1 free share for every 1 purchased + your purchase is tax & NI free! If a higher rate tax payer you effectively pay less than 60p for £2 worth of shares!

skintpaul

If its a stable (listed shares) firm, and you plan to be there long term, and you can afford it, then yes.

check terms thoroughly!!

ScoobyZ

Hi my wife has option on Tesco shares at £1.68 do you think this is worth going for?

They seemed to have bottomed out at the moment having once reached £4.87

jennyjj

ScoobyZ wrote: »

Hi my wife has option on Tesco shares at £1.68 do you think this is worth going for?

They seemed to have bottomed out at the moment having once reached £4.87

A sharesave scheme in a footsie company is a no-brainer. Unless she plans to quit within the option period, max it out.

IanSt

Sounds like a good deal.

However good financial sense would be to normally have a diverse range of investments, and having a lot of money in a single company stock and also working for that company is at the higher level of risks.

So as I've no idea on your other savings, one word of advice would be to make sure that you don't keep all of your money tied up in them once they are in your wife's name. That way if the company does ever get into trouble then you don't face the possible double-whammy of losing money on the stocks and possible redundancy at the same time.

ScoobyZ

jennyjj wrote: »

A sharesave scheme in a footsie company is a no-brainer. Unless she plans to quit within the option period, max it out.

Thanks, might just do that as if the shares drop all I loose is interest I would have got in an account.

IanSt wrote: »

Sounds like a good deal.

However good financial sense would be to normally have a diverse range of investments, and having a lot of money in a single company stock and also working for that company is at the higher level of risks.

So as I've no idea on your other savings, one word of advice would be to make sure that you don't keep all of your money tied up in them once they are in your wife's name. That way if the company does ever get into trouble then you don't face the possible double-whammy of losing money on the stocks and possible redundancy at the same time.

Have a BTL and both have company Pensions Schemes. Hers is DC and mind DB (NHS & Boots). My 5% reg savers are finishing and the amounts I can put in are reducing (Nationwide 2x£500 dropping to 2x£250) so might put some in here.