Under SAYE, you can save a regular amounts of typically between £5 and £250 a month, over a period of three or five years. Shares are bought from income after tax is deducted. In return, employees have an option to buy shares at a price fixed at the start of the saving period. This price can be 20 per cent lower than the market value of those shares, making them good value, and when you sell SAYE shares there is no income tax to pay.
Even if the company’s shares do badly and fall below the option price, employees can take the cash plus bonus instead. So, with the right company these schemes can be highly rewarding.
