Share Save Scheme at work

chelseablue

The company I work for recently announced we could join their Share Save Scheme at work

I have until midnight tonight to decide whether to go for the 3 years or 5 years scheme

I will be putting in £50 a month and the share option price for both is £2.17p a share

Would I better going for 3 or 5 years? Or is it just personal preference?

AlanP_2

chelseablue wrote: »

The company I work for recently announced we could join their Share Save Scheme at work

I have until midnight tonight to decide whether to go for the 3 years or 5 years scheme

I will be putting in £50 a month and the share option price for both is £2.17p a share

Would I better going for 3 or 5 years? Or is it just personal preference?

Yes. Presumably you would "hope" that the price in 5 years would be better than the price in 3 years so make a higher profit but who knows.

Mr.Saver

Reason for longer time:
If the company share price goes up over time, you'd get more back.

Reason for shorter time:
If the company share price goes down or stay the same, you can get out quicker and loss less (or no loss at all)

Also, it depends on your overall portfolio. So, in short, if you expect the company share price to go up and you won't accumulate more than 5% of the size of you portfolio in one company's share, go for longer time.

Anonymous101

I'd say the longer one is the better option.

I'm obviously not sure of the specifics of your scheme but one I've been part of in the past allow you to save for a period of time (3 or 5 years) then at the end of that period decide if you want to purchase shares for a price set out at the beginning of the period.

I'd say that just by chance there is higher probability that the shares will be higher over a longer time frame than a shorter one and since you are able to apply the pre-agreed price to the full value of the saving its better to go for the longer period.

As others have said that does depend on lots of factors though. For example. Will you need the money at any point during that period or do you see yourself staying with the company for 5 years?

Begsey

I'd go 5 years, it would let you get more money in there.
Family member done it years ago. After the term, they could take their money back (with any interest it had gained)or buy the shares at the option price. You just do whatever is right at the time.

bowlhead99

One factor to consider is that people don't stay in their jobs forever. Statistically the average person is more likely to stay with their employer for the next three years from today than the next five years from today. If you quit or get fired before the scheme matures you won't get to keep the potential profits. So, I would personally hedge my bets and do part on the shorter scheme as well as part in the longer one.

When the three year one is up you can kick off another one, and at that point in time perhaps you will be able to afford more than just £50 a month (the maximum under HMRC rules is £500pm across your schemes). If you only have a reasonably small amount of money that you can spare to put in, i would just stick it all in the shorter one and revisit what you can afford when it comes to an end.

Flobberchops

As bowlhead99 says: consider whether you'll be with the company in 3/5 years. If you've been with them for the last 20 years and can't imagine any scenario other than staying with them for another 20, then great, go for the 5 years. If you hate the job and are revising your CV on a weekly basis.... eh, maybe think twice.

All things being equal the best strategy is probably to contribute the maximum to sharesave, for the maximum term. But of course you have to consider your own circumstances.

My own recommendation: if you're unsure, just do it. Contribute a little and see what happens. It's a low-risk speculation that could quite possibly be the easiest couple of hundred quid profit you ever made.

[edit] Yes, I appreciate the irony of posting this after midnight!

ANDY597

Can you do both for the first 2 years ? So youd mature
2022, 2024. Then same again next year so you'd mature 2023, 2025

When I was doing sharesave I went 5 years every year so what starts to happen is one mature's every year as a new one starts.

Hope that even made sense

ANDY597

Oh and sharesaves aren't usuallg tax efficient they come off net pay.

So perhaps consider any salary sacrifice options such as pension, avc or share incentive might be better for you in the long run.