Share Save Scheme

daryl86

Good Morning

I would like some advise on my current share save scheme i have with my company. being new to shares i'm a little bit ignorant when it comes to buying and selling etc, so here's my question

I opted into a share save scheme in march 2015, where i purchase shares on a monthly basis. the share price then was £2.60 and that's what i am currently buying them for.

As i have a family and a mortgage, i opted to pay just £60 pound a month,

To date, I hold 830 shares, which total to a balance of £2040.

My Maturity date is up in March (3 years), and the current share price is 757.00.

Am i correct in thinking, that in March, i can sell my 830 shares for the current share price of 7.57, totaling a sale price of £6225 which i will have?


Thanks in Advance

eranou

With sharesave schemes your employer will set an option price at outset, it looks in your case it was £2.60 per share. You don't actually buy shares each month the money basically gets saved into a pot which at the maturity you have the option to use to either buy the shares at the option price of £2.60 each then immediately sell them at the then price which is hopefully higher than the option price.

e.g if the share price is £7.57 at maturity and you have 830 shares then you could sell them for £6,283.10.

If the current price is lower than the option price at maturity then you have the option of not buying the shares and just taking back your contributions. Therefore you at least get back what you pay in.

Commission can be charged when selling the shares so take this into account when deciding whether to buy and sell the shares at maturity. The scheme booklet should say what commission would be charged.

Another option you have at maturity is to have the shares transferred to you. You could then transfer them to a Stocks and Shares ISA within 90 days if you have ISA allowance remaining then you could decide when to sell in future.

Twopints

Is this a Share save scheme, where you pay a set amount per month and can purchase (or not) the shares at the option price after 3 years?

Or is it an AESOP (all employee share ownership plan), also sometimes called Share Incentive Plans (SIPS) where you buy shares each month, and may receive bonus shares - which it sounds more like from the OP. If it is an AESOP/SIP then there are some rules about tax and NI as the shares are purchased from pre-tax income.

eranou

OP said it has a maturity date so its most likely a SAYE scheme.

Twopints

eranou wrote: »

OP said it has a maturity date so its most likely a SAYE scheme.

Agreed, but they also mention having purchased shares monthly (it may be that this is just a nominal figure for illustration).

ETA: based on a value of £2040 = 34 monthly payments of £60, so a final total of £2160 when the last 2 payments are added = 830 shares @ £2.60. So you are right, it is a Sharesave for an option price of £2.60 on 830 shares.

Tom99

[FONT=Verdana, sans-serif]I think the gain is subject to CGT when you sell so something to watch out for if you have other gains that year which would take your profit over £11,300 and do not transfer into an ISA.[/FONT]
[FONT=Verdana, sans-serif]If CGT would be paid you can always transfer some of the shares to a spouse before selling. Some companies used to offer that as part of the service they provide on maturity.[/FONT]

MallyGirl

If you are new to shares and decide to sell them at maturity don’t just use the scheme operator to do this - they are unlikely to be the cheapest. My scheme is run by equiniti who wanted a 1% fee to sell (my shares had grown to £21k so this would have been a £210 fee) whereas I ended up using x-o for £5.95.