5 things you should know about UK share plans

22 October 2020

By Rebecca Mitchell

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We pride ourselves at Eximia on simplifying the complex – and effectively communicating share plans definitely falls into this category.

People can switch off when topics are of a financial and legal nature, often because of the waves of technical terms and jargon that come with them.

But what employees don’t always know is they’re not as complicated as they think – and the potential financial benefits can be game changing.

So, to get you comfortable with the conversation, here are five things every employee should know about UK share plans:

 

1) Several share plans are available: There are a number of different plans, such as Enterprise Management Incentive (EMI), Company Share Option (CSOP), Save As You Earn (SAYE –  which is also known as Sharesave) or Share Incentive Plans (SIP). The share plan(s) on offer to you will each have different features and benefits – so make sure you find out what they are.

2) They’re flexible: Some let you become a shareholder on day one, with others having you wait or save towards becoming a shareholder at a later date. Also, there are plans allowing you to change your contributions, stop or take a savings break. Don’t be afraid to ask your internal share plan experts for more information.

3) They’re affordable: For example, under a SAYE plan, you can save as little as £5 per month, and with SIP from only £10 per month.

4) They turn you into a shareholder: Once you’ve bought shares under a SIP, or exchanged your savings pot for shares under a SAYE, you become a shareholder in your employer – meaning you may be able to take part in company votes and receive dividends (this is cash paid by the company from its profits, based on the number of shares you hold).

5) There can be tax savings: For example, SAYE gives you tax savings by allowing companies to offer discounted shares of up to 20%. Whilst your money used to purchase shares under a SIP is taken from your pre-taxed pay, meaning you don’t pay income tax or national insurance on this amount. There are requirements to meet in order to get these savings, so take a deeper look into it.

 

We hope this has helped demystify some of the details around popular UK share plans, Inspiring more discovery into share plans and whether they are right for you as an employee – or right for your business if you are an employer.

If you’d like to carry on the conversation and discover how Eximia can help employees be engaged and ready for the share plan opportunities of today – and tomorrow – let us know.

Rebecca Mitchell

Relationship & Project Manager

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