Ifs Proshare research: Increase in employees saving through share ownership

There has been a significant increase in the number of employees contributing to share ownership schemes, according to the ifs ProShare annual survey.

The survey found that the vast majority of the approximately two million employees currently participating in some form of employee share scheme do so via a share incentive plan (Sip) or a save as you earn (SAYE) or sharesave scheme.

The number of employees participating in sharesave schemes increased by over 16% with 589,152 joining an three, five or seven year contract, compared to 505,562 in 2008.

The average monthly contribution per employee into all sharesave contracts rose by 35% to £111 a month, from £82 in 2008.

The average amount of money invested in a Sip rose by 13% to £78 a month, from £69 in 2008.

Julie Richardson, head of employee share ownership at ifs ProShare, commented: “Employee share plans are a relatively simple but tax efficient method of saving, with employees gaining a stake in the company they work for and the opportunity to share in the financial success of their employer.

“However the current monthly savings limit for SAYE of £250, a limit that has been in place since 1991 is out of date. If this had been raised in line with inflation the limit would now stand at over £400. We call on the government to increase this limit in order to encourage people to save more.

“The significant increases in the monthly amount of money employees are contributing, in both Sip and SAYE, suggest that more employees are recognising the benefits of these schemes. We hope the government will provide the necessary support to allow these trends to continue.”

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