Company ShareSave Scheme

GreyPilgrim

Our company has just announced it's employee sharesave scheme and I wanted your thoughts on how good a deal you think it will be. Details are:

• We nominate to have between £5 and £100 a month deducted from our salaries (after tax) for the next three years.
• After three years, the saved amount of (£180 to £3,600) is given a tax free bonus (equivalent to 2.8% monthly compounded)
• The total sum is then used to purchase shares.
• The share price we will buy at in three years is set as the price NOW (about three days ago in fact), minus 20%

I'm personally going to opt for the full £100 per month. I think the share price is at an all time low, and I'd like to take a reduced risk first stab at owning shares. I'm happy to be in it for the long term and I'm not after making a quick killing to be honest.

I suppose it's helpful to actually tell you what the company name is, but not sure whether that's frowned upon here. I guess I would just like your experience / thoughts of company sharesave schemes in general.

Or I could tell you the company name if you think it wouldn't cause a problem.

gazza975526570

No - tell us who the company is?

Im guessing a bank?

GreyPilgrim

gazza975526570 wrote: »

No - tell us who the company is?

Im guessing a bank?

Nope.

Get the company sector right, and I'll tell you who it is.

GreyPilgrim

Ah I'll tell you anyway - it's VirginMedia

gazza975526570

cheese?! Ive no idea!!

My experience of that has been positive and i take advantage of them through my Company most years dependent upon the share price at that time. I guess it depends upon who it is - just because the share price is at a historical low now doesnt mean it wont and cant drop lower

Jonbvn

GreyPilgrim wrote: »

Nope.

Get the company sector right, and I'll tell you who it is.

Is it Ann Summers?;)

GreyPilgrim

VirginMedia!

Browntrout_2

Presumably you cannot lose as if the share price in three years time is lower than 20% below today's price then you can opt to get all the cash back + the bonus interest payment, the small risk you are taking is compared to saving the same cash at high street rates, which are variable and taxable.

I have a similar 5 year deal (in another telco though), if in profit I plan to purchase them and sell within a few days, too much risk having shares in a single company that you work for also.

VirginMedia is the combination of two companies (TWT and NTL) who have between them never made profit in their 10 years or so of existence, in addition they have a mountain of debt that is constantly being rolled into new deals that quite often dilute the shares. In fact both companies shareholders were wiped out in chapter11 and the creation of the 'new' shares in VM.

Hopefully the cash is held in escrow somewhere safe to stop the pilfering bosses sticking their snouts in the trough

swiss69

They key with these for me is maximise the savings. As a previous poster said, you normally have the option to buy shares, it is not compulsory so in a way you can't really lose (Other than if you had saved the money elsewhere and got a better rate) - This potential loss on £100 per month would not be massive and therefore does not outweigh (IMO) the potential gains.

Another trick is to see what the option price is next year ( Companies usually do one of these every year. If the option price is considerably lower next year you may want to stop the one you are doing and redirect the money into the new one (If you plan to stay and this is the maximum you can do)

Sharesaves have served me very well in the past.

GreyPilgrim

Well I'm doing some rudimentary calcualtions based on "what will the value of the £3,600 be after 3 years including the tax freebonus" versus "How much money would £100 a month put into a top paying ISA for 3 years earn in interest"...

And up to the end of the three year period, the ISA wins.

Although I'm aware of VM's troubles past (the fact that the media always refer to us as 'Troubled Cable Company VirginMedia'!), I do have some hope for the future.

McSaver

I think these Sharesave Schemes are always worth investing into. At least you can get shares at a reduced price without actually buying them until the plan matures. Its a pity that your only allowed to do £100 a month for 3 years. If the share value doubles in that time then you will of made a nice profit. but if the shares half in value then you would get your cash back with the bonus so you wont of lost much on if it was paid into a savings account or regular savers for that matter.

If the share price doubles in the 3 year span then you get back £9,450.