company share save scheme - is the money safe if the company goes bump?

anna42hmr

ok, this may be a silly question but with all the scaremongering about banks going bump, it got me thinking, my savings accounts are covered by the compensation scheeme, after northern rock collapse etc as i have no where near that money, but does the savings paid into company share save schemes (ie where you pay into for x number of years before you get the shares) covered under this guarentee, or any other, of it the company folds, would i loose all savings i paid in pending buying the shares?

as i currently pay into several of these (as i pay in over 5 years, so have one running for £30 a month, one for £35 a month, £40 a month, £45 a month and £50 a month) though the £30 one i will be able to get purchase the shares in october

not that i think the company i work for is likely to fold, but am wondering where i would stand in worse case senario

Lokolo

If the company goes into solvency then you lose you shares.

Like any investment, the money you put in must be money you can afford to lose. But usually (USUALLY), after a number of years you will get a higher return to what you could get in a savings account.

anna42hmr

i understand that about the shares, but really until you actually buy the shares, which is several years down the line, you really put the money into savings,

its only at the end of the term, when you actually buy the shares at a price fixed at the beginning of the term, and at the end of the 3/5/7 years you can choose not to buy the shares and withdraw the money you have "saved" and have that back and a certain amount of bonus,

so technicaly it is not shares i own at this point and that is why i am trying to establish wether these "savings" are covered the same way as if for instance i had paid that money into an isa/regular savers accounts etc

Lokolo

Um I should think what your company has done is open a bank account in your name and put your money in there. So as long as its under £35k it shsould be ok.

But to be honest, don't be worried about the banks, the government don't want banks to start failing, would ruin the whole economy.

Browntoa

ours is run by the halifax so I'm assuming it's safe

molerat

The money is usually held by a bank / building society sharesave department. Mine is in YBS and I have complete access to it and the company cannot touch it in any way until I release it to buy the shares. Who is holding the money for your accounts ?

debbie42

Lokolo wrote: »

Um I should think what your company has done is open a bank account in your name and put your money in there. So as long as its under £35k it shsould be ok.

Sharesave schemes are not the same as holding actual company shares. They are regulated plans which give you an option to buy shares at a maturity date, having contributed the cash to a special regular savings plan. You can choose to exercise (or not) at the end of the scheme. As such there is not the same risk as would normally occur with owning actual shares until (and if) you buy them at their maturity date.

Leeds_Fella

Do you think Halifax is safe. I do sincereley hope so but all the press etc is worrying me no end.

Aegis

Leeds_Fella wrote: »

Do you think Halifax is safe. I do sincereley hope so but all the press etc is worrying me no end.

I can't see a bank the size of HBOS going under any time soon. That's not to say it can't happen, but I think it's a fairly safe bank.

I certainly wouldn't want to be holding their shares lately though!

debbie42

Aegis wrote: »

I certainly wouldn't want to be holding their shares lately though!

I wish I'd bought a huge amount at the same time as the HBOS directors did recently!

(and then sold them a week later...)

Leeds_Fella

I have lots of HBOS shares through the various company share schemes over the last 4 years, I work there, have lots of equity in a BOS savings account from the recent sale of my house.

All eggs in one basket or should I not be worried ??

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