Sharesave schemes at work??

Anyone know much about sharesave schemes? Anyone in one?

I signed up for a 3 year one at work with the intention of this being the deposit on a flat & it?s due to pay out in June. I understand the jist of how they work: basically my company offers me shares at a reduced rate which stays fixed for either 3 or 5 years depending on which duration you choose, I then pay a certain amount each month into the scheme then when the time is up if the shares have risen in price from what I was offered I can buy the shares at the reduced price & sell them at the current price & therefore make a profit. However if the shares have stayed the same price or have dropped in price I get all the money that I?ve been paying into the scheme back plus 2 months instalments as interest.

So 3 years ago I was offered the shares at 187.5p a share & I?ve been paying ?250 a month in the scheme (?250 is the max you are allowed to put in) so will have ?9000 saved up & today they are worth 303.00p (the highest they?ve been is around 395p but the average I?d say is about 350p)

But I was wondering if anyone knows the best way to play the game, especially the way economy is looking at the moment. I desperately want to buy my first place as soon as I can, but is it better to wait it out, can I buy the shares at 187.5p now then in 6 or 12 months time sell them for what they are worth then?

Or sell them in June, probably not make as much profit but the take advantage of the possibility of lower house prices?

I?d be grateful for any advice that gives me a better idea of how they work & get the most from it.

Thanks in advance

It's a gamble. Guaranteed return now, or possible loss in the future. You need to know what your "risk appetite" is. With the market in the state it is now, I would sell the shares immediately and stick it in a high interest account until I needed it for a deposit. 50% return across 3 years is a good return....

If you didn't have a use for the cash now then makes sense to 'let it ride' a bit. But as you do and you are making ~?1.20 a share you are 'winning', sell up and stop looking at share prices

Last lot of shares I sold - after they struggled for ages - went up by ~15% 2 days after I sold mine. If I hadn't have looked at that, I'd have been happy for what I sold them for as I had already made a fair profit!

The only thing you will have is the shares at the end of the programme. Those shares a potentially worth nothing depending on the market and with the current volatility in the market i would concur and sell them now for a profit you know rather than hang on for any potentially in the market. roughly speaking ?9000 buys you 4,500 shares at ?2, so at ?3.00 you make ?13,500. If you then assume ?3.50 as your marker for selling you only make ?15,750. a grand total of ?2,250 difference. Are you willing to loose the ?9000 thats yours for an additonal ?2,250 which doesnt exist at the moment ? You should bare in mind that most people who play the short market will have opptions in many companies to try and equal out any falls or out right disasters in any given sector. You only have shares in one company so if they go's bang you are going to loose everything. If you really want to play the market then you should spread your love rather than keep it all in the same pot.

I know you say that your money is protected against falls and that may be the case for small falls but I would be suprised if that is also the case for large falls as the very inference of that would be that the company is in trouble. Check your small print !!!!

This advise is given with a pinch of salt.

Oh and don't forget as they are over the GBP9k(?) limit, you will pay 'capital gains' when you sell them!!

Just looked up the exact current figure - here, read this ...

http://www.direct.gov.uk/en/MoneyTax...ts/DG_10013733

[fizzwheel]

If it were me, I'd take the money and get yourself onto the housing ladder.

Thanks for the replies so far peeps.

Yeah these are the only shares that I've got. The company that I work for made ?238m profit in the second part of last year. I haven't been religiously checking the share prices every week, but I thought I'd have a gander as it's coming up to June but I was suprised to see that they had fallen from the last time I checked them about 6 months ago.

I'm not really a gambler when it comes to these things thats why I opted for sharesave as it's pretty low risk. So was just wondering what sorta options I might have. So am I right in thinking come June I have 90 days to buy them at 187.5p & sell them? At the moment it doesn't look like i'm going to have to worry about capital gains.

I'm not out to make **** loads, as long as I have enough for a deposit & any fees to get a place I'll be more than happy. However, lenders are getting a little tougher & round here the cheapest flats are about ?120k so if lenders are requiring, say 15 or 20% deposits, the brilliant plan I had 3 years ago looks pretty bleak, lol. But on the brighter side if house prices start to get cheaper then then the deposit will be lower?

Cheers

[flymo]

dont be soft taking the money, if the shares are worth more than the option price you are entitled to then take the shares and sell them immeadiately. Why would you ignore a profit.

Blue is right though in that you will be liable to tax on the sale but it you get somebody to estimate the cost of that for you then you can just factor that in.

I completed a 5 year term on this scheme and doubled my money, you cannot lose. The only risk is that if you take the shares and keep hold of them then the value may go down as well as up. However there is no pressure on you to take shares.

[Balky001]

Gazman, today is the only price that's important, not average, as you have bought a call option, a right to buy at an agreed price. You may want to check though if it has dropped quicker than its peers and why.

The scheme may give you the option of taking cash (initial invest plus P&L) or the physical shares. What's the future prospect of the company in the short term i.e. is it a buy, hold or sell for the investment houses? If you are not sure then you are gambling with your good fortune and I would personally stick it either in the bank or a cash ISA. If you want exposure to the stock market, putting it in a ISA Unit Trust gives diversification and protects from tax.

Holding a single stock is extremely risky unless you have real reason to believe it will outperform the market (even if it goes up has it gone up more than the rest of the market etc). Even good stocks can go down, look at the multi-billionaire currency investor who put a billion dollars in to Bear Stern, a solid investment bank 2 years ago. Bought at $100 - $150 a share, JPM just bought them all at $2. Even very experienced investors can make a lose.

As Blue said, if you sell don't look at the share price again

God this is like being back at work and telling the people there....

With our share schemes you can sit tight for 6 months from the day on maturity until you wish to exercise them. So say you don't want to take the risk in June...you could wait and if the share price rises by September you can exercise then.

It all depends on the rules of the share scheme that you would of received when you signed up to join or if you don’t have a copy you should be able to gain a copy.

If it is Barclays or HBOS that run your scheme for the company that is how their rules work. HBOS will also send you a letter detailing all of your options that are available to you. You also have to sign your right for them to send the money you have been saving to your company for them to exercise on your behalf.

Also just another quick thing. Check how your company fixes the sell back share price. As you don’t want to get messed around. We fix ours by the closing price the day before the employee has signed/dated their wish to exercise form.

lily