An increasing number of people are turning to employee share schemes in order to save more.
In a challenging market it is often difficult for staff to save. However, according to findings by ProShare, employees are now saving an additional £60m each month through tax-advantaged employee share plans.
The Save as You Earn (SAYE) plan, introduced in 1980, is still the most popular form of employee share ownership according to the report. Approximately 1.5m accounts are held throughout the UK with SAYE whilst the Share Incentive Plan (SIP) schemes, which were introduced in 2000, had just over a million. Both reported rises in monthly average savings contributions from employees of £122.94 to £156.23 for SAYE and from £80 to £89 per month for SIP.
Tax-advantaged share plans are designed to offer their employees the opportunity to purchase shares in the companies they work for but also as an effective way to save. For many years, employee share ownership has enjoyed cross-party support in Parliament as a means of boosting business productivity and increasing staff retention levels as well.
Gabbi Stopp, head of employee share ownership at ProShare commented: “The findings from the SIP & SAYE survey once again show that despite the increasingly broad array of savings choices available to consumers – be it auto-enrolment pensions, the introduction of the Lifetime ISA, Help to Save and Help to Buy – and in many cases, low returns, employee share plans remain a very effective means in which to save.
“The value of SAYE and of SIP is both understood and highly regarded by employers and employees alike and it is quite clear that share plans are seen as far more than effective savings vehicles by employees. Indeed, the findings can be seen as a vote of confidence in the organisations they work for and a long-term investment in their futures as employee shareholders, which can only be a good thing for the UK economy.”