UK’s Workplace Share Schemes Are Hurting Employees
For the average employee with little to no experience in investing in the stock market, being sold the benefits of joining a workplace share scheme might be the worst investment decision for them.
There are two share schemes approved by the UK tax office, HMRC, that are commonly offered or rather sold to employees in the UK. The first is Save As You Earn (SAYE) or sometimes known as Sharesave. The second is Share Incentive Plans (SIPs) or sometimes known as Share Match schemes.
Even though I have been investing in the stock market for many years now, when my employer offered their Sharesave scheme, I somehow threw all my investing principles out of the window and bought into all the upsides they told me, without stopping to think about all the downsides. Now I have been through those schemes, I want to share what I have learned with you.
Save As You Earn (SAYE) / Sharesave
For those of you not familiar with SAYE schemes, it is a savings plan that lasts for either 3 or 5 years, where at maturity, you are given the option to buy shares in your employer at the pre-agreed price, up to 20% discounted. During this time, you commit having a fixed amount of your net pay put away into a trust account.
