You may be in a fortunate position as an employee, that is, if you are employed by a specially listed firm, one that is allowed to run a SAYE scheme. SAYE is a win-win situation for employees. Your only commitment is to save between £5 and £250 per month for 3 or 5 years. Once the term is completed you can decide whether to use your cash pool to buy shares in your employer’s firm at a discount of up to 20% of the price of the shares (when the SAYE scheme started).
This makes SAYE the only real risk free route to the stock market (and it’s promoted by the government to encourage wider share ownership and employee participation).
SAYE was introduced 31 years ago to encourage staff to own a stake in their own firm. Today approximately 1.7 M people are members.
Of course there are other forms of share schemes for employees but these tend to be for key personnel, these need to be carefully drawn up to ensure they are within HMRC legislation. The cost of setting up bespoke share schemes for key individuals is between £5-12,500 per scheme.
However for the majority of all other employees the SAYE is cost effective and popular.
Do you have any queries about the SAYE scheme, or share ownership and employee participation? Then contact one of our Financial Planning Consultants, at Pareto Lawrence we offer both Financial and tax planning advice to corporate and private clients.