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SAYE limit increase

3rd February 2014 6 Comments

 

“With the monthly saving for SAYE increasing from £250 to £500 will all companies be offering this to their employees?  If not why not?”

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  1. said

    4th February 2014 at 11:28 am

    I can’t speak for all companies, but we plan to make a separate offer at the higher limit within 42 days of the change (which comes into effect at the start of the new tax year).

    The 20% discount is likely to continue since the cost is not great. A high percentage of participants currently save the maximum £250 and so this will be appreciated. NB we do not at present operate a SIP.

    • FTSE250 said

      4th February 2014 at 10:41 am

      For approximately ten years, every SAYE invitation was over-subscribed by a factor of 2x or 3x, such that the scaling back process became part of the annual ritual and employees even factored that into the applications they made. The full 20% discount was offered on all but one occasion.

      Because of the accounting cost associated with granting options and the fact that participation rates never rose beyond 17% -18%, no invitations have been made since 2010, and it is unlikely that further invitations will be made in the foreseeable future.

      There is now a Share Incentive Plan, in which around 8% of employees participate.

      • FTSE100 said

        3rd February 2014 at 4:57 pm

        No decision made yet. It will be a surprise if we don’t use the extra flexibility.

        • FTSE100 said

          3rd February 2014 at 4:23 pm

          Having first considered headrooms, and the costs involved, we are planning to allow employees to save the full £500 but limit the amount avilable to save in any one year. We have not year decided what the limit per year will be but it is likely to remain £250.

          • FTSE SMALL CAP said

            3rd February 2014 at 3:17 pm

            We will look to increase our limit to £500 however we will do some modelling to work out a ballpark P&L charge so that we can give the Board comfort that this does not become excessive. The reality is that only a proportion of employees will be able to afford a £500 a month deduction so we will probably assume that employees currently at the £250 maximum will look to up their contribution to £500.

            • FTSE250 said

              3rd February 2014 at 3:10 pm

              Yes we will increase to the new limits. Some fancy footwork may be required to delay invitations until after the start of new tax year.

              Since most companies give 20% discount on option price, the higher contributions will mean a higher charge to P&L but the participation levels amongst employees make it worth it.

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