Employee participation in share ownership schemes has plummeted to a 16 year low, according to accountancy group UHY Hacker Young.
The number of UK employees who were granted options under a save as you earn (SAYE) share option scheme was 520,000 in 2007-08, the lowest figure since 1993-94. This is now 60% lower than 2001-02 when SAYE option shares were granted to 1.3 million employees.
UHY Hacker Young said that this dramatic decline is of great concern, as broader employee share ownership is generally recognised as positive for the UK economy.
Roy Maugham, tax partner at UHY Hacker Young, said: “If the government really wants to follow through on its professed commitment to employee ownership share schemes, then it needs to stop HMRC reducing their attractiveness.
“Over the last twelve months HM Revenue and Customs (HMRC) has consistently cut the interest rate (bonus rate) on the accounts employees pay their savings into. Most recently, HMRC cut the interest rate on SAYE accounts to 0.54%, radically reducing the attractiveness of employee ownership share schemes.”