SAYE schemes remain popular

FINANCIAL PARTICIPATION

Sharesave remains a popular means of financial participation, with the number of schemes administered by the main SAYE administrators increasing by 12% in the last 12 months, according to a survey by Proshare.

Key survey results

The number of schemes and accounts administered now stands at 1,333, compared with 1,188 a year ago.
The average monthly saving per account is £69.28. This is 2% higher than last year's average of £67.97.
More than eight in ten schemes (84%) offers the full 20% discount.

What is Sharesave?

SAYE is a tax-advantaged scheme under which employees are given the right ("option") to buy, at a future exercise date, a certain number of shares in the company at an exercise price that is fixed when the option is granted.

Employees are granted share options at a discount of up to 20% at the start of the savings contract.
They then save a fixed monthly amount of between £5 and £250 for three, five or seven years under a Sharesave savings contract with either a bank or building society.
The proceeds of the savings contract, including the bonus, can be used to exercise the option, or taken in tax-free cash.
No tax or national insurance contributions are charged on the discount or on the gain made when the option is exercised.

Further details

For more information about share schemes visit the Inland Revenue web site at www.inlandrevenue.gov.uk/shareschemes/index.htm

Want to know more?

Title: Sharesave Survey 2004, Proshare.

Methodology: The survey was based on responses received from the six main SAYE administrators.

Availability: A free copy of the report is available on the Proshare web site at www.proshare.org

Posted 9 September 2004