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Employee share save schemes remain popular despite market turmoil

A survey by ifs ProShare has revealed that the number of employees investing in Save As You Earn (SAYE) share schemes increased by 5% last year, to just over 1.4 million.

The survey, based on a sample of 445 UK companies, including 79 of the FTSE 100, found:

  • As many as 44% of eligible employees are participating in at least one SAYE share scheme, an increase from 38% the previous year.

  • The average amount of money being invested into SAYE schemes was down slightly from £107 in 2009 to £101 in 2010, although this remains significantly higher than 2008 average of £86 per share plan.



Share Incentive Plans

The researchers also contacted 429 companies offering Share Incentive Plans (SIPs), which can be in a variety of forms including free shares given to employees, or partnership and matching shares whereby the employee receives additional shares for each one they buy.

The survey revealed that:

  • Just over 900,000 employees participated in some form of SIP out of a total of 1.6 million who were eligible.

  • Over 350,000 employees received free shares from their employers with a reported total value of £238.8 million*. [353,235 employees surveyed received free shares at an average value of £675.98 per employee.]

  • Whilst the trend for companies offering free SIP shares continued to fall, from 24% in 2009 to 14% in 2010, the number offering matching shares rose from 46% to 53%.

A final word

“Despite the market turmoil in recent years, employees remain committed to this tax efficient, low risk method of saving. This is underlined by the fact that nearly half of all employees in our survey who can take part in a company SAYE share scheme do take up this option. If a company’s share price is not what they’d hoped at the end of their share plan they always have the option of withdrawing their saved money or waiting to see if the price rises in the future.” - John Collison, Head of ifs ProShare.

Want to know more?

For further information about employee share ownership or ifs ProShare, visit www.ifsProShare.org.

ifs ProShare is part of the ifs School of Finance. It’s a not-for-profit membership organisation that provides a “voice for the Employee Share Ownership industry”.

Date 25/08/2011

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