Sainsburys Sharesave 2021 - Is it worth optinging for it?

MaxiRobriguez

I'd go for it. It's pretty much risk free as you have the option at the end of the period not to purchase.

Even if the stock goes nowhere, getting a 20% discount over three years is a decent shout to beat performance of a general tracker fund.

Downside potential is small, upside potential is large.

refluxer

Dandytf said:

Interested to know about workplace sharesave -Non Sainsbury's.
If after 3 years share price is lower -Is it an option to purchase anyway and self make up difference.

In my experience, the share price and number of shares is dictated at the start of a sharesave scheme so if the share price at the time of exercising your option after 3 years is a lower than the initial offer price, then taking the shares anyway would be a bad move. Bear in mind (in this case) you're getting a 20% discount, so the shares would have to be significantly lower for you to be worse off but if this did turn out to be the case and you were still wanting to buy the shares, then you'd be better off not exercising your option, taking the cash instead and buying the shares yourself as you'd obviously get more shares for the amount you'd invested.

[Deleted User]

Yes, and sharesave is exclusive to the employees of a participating company. 
Imo sharesave shares are really good companions for an individual to start the investment journey and to continue with it. To be gifted a really generous point of entry and protected from loss for the first three years makes it so much easier to manage volatility later. It builds resilience without which an individual is very much at the mercy of the financial services industry.

WilkinsonM

I would echo what others have said - I’ve just signed up to the very same scheme for this year.  I was a bit disappointed that we weren't offered a 5 year term like previous years.  At no point in the 3 years will you own any shares so you won’t  be receiving  dividends.  The money is safe and you either get it all back or you get to make a profit depending on the share price in March 2024.  You can cash in a time any time during the 3 years if you need/want to.  

I have a 5 year scheme also maturing in March 2024, the option price is about £2.60 (can’t be be bothered to log in to Equiniti right now to get a precise figure) and I’ve been wondering over the last few days if I shouldn’t cash that one out but I’ve decided to keep it going, for now.  I don’t need the cash.

That leads me on to another point.  It’s £250 maximum you can have in share save schemes, per pay period.  If you max out the full £250 this offering, you won’t  be entitled to join next years scheme.  It might be worth thinking about say £80 per pay period in this years scheme which will give you the option of joining next years scheme and the offering in 2022.  

Just remember Sainsburys pay 4 weekly so you will be making 13 contributions per year.  It doesn’t mean you pay in more or the scheme matures early, it means your total contribution sits there doing nothing for a while until March maturity.

Good luck!

Dandytf

refluxer said:

Dandytf said:

Interested to know about workplace sharesave -Non Sainsbury's.
If after 3 years share price is lower -Is it an option to purchase anyway and self make up difference.

In my experience, the share price and number of shares is dictated at the start of a sharesave scheme so if the share price at the time of exercising your option after 3 years is a lower than the initial offer price, then taking the shares anyway would be a bad move. Bear in mind (in this case) you're getting a 20% discount, so the shares would have to be significantly lower for you to be worse off but if this did turn out to be the case and you were still wanting to buy the shares, then you'd be better off not exercising your option, taking the cash instead and buying the shares yourself as you'd obviously get more shares for the amount you'd invested.

Thanks all reply's
it's the withdraw and purchase shares separately that I forget about.
My Initial 3 years with Non Sainsburys employers expires Feb end 21.
Share price is seriously lower than quoted cost inc' 20% discount.
Though not concerned as their not projected to return to profitability 2-3 years approx.
Alternative option was part advised earlier today -withdraw loss making funds and transfer to existing Isa.
Hopefully 1st lot of 5 years returns something in approx 2 years time.
Ive found share-save very convenient to save once or twice per year over following 3-5 years.

Gadfium

ZingPowZing said:

Sharesave is risk free investment with good potential upside. You are 20% ahead at the start. 

I think that option was removed a number of years ago. If you cancel early then for the period that remains in the cancelled scheme you lose the option to invest that amount. In other words if the scheme allows a maximum of £250 per month and you cancel a plan where you were investing £100 per month, then that £100 per month becomes "locked" out of your monthly allowance for the remainder of the cancelled plans duration.

george4064

A key point to remember is to always go into a sharesave scheme with the intention of selling the shares as soon as you exercise the options, if you do, and reinvest into a globally diversified portfolio.

couriervanman

My wife used to work for Tesco long time ago and was saving the maximum amount but was then made redundant at the same time of the "book fiddling saga" and ended taking the money instead as the share price was lower than the original offer price.