Over the last two years we have seen some interesting changes in the share plan market.
We are now starting to see the impact of these changes, from trend analysis of 2015 share plan data and discussions with market advocates.
For example, the increase in the sharesave maximum savings limits introduced by HM Revenue and Customs (HMRC) and campaigned for by industry body IFS ProShare, has led to increased participation rates in established all-employee share plans.
YBS Share Plans average monthly savings levels have increased considerably for sharesave schemes to £129, up from £93 in 2013, while across the industry as a whole, these now stand at £107. This demonstrates the value employees place in share ownership.
New plans continue to be popular, with companies introducing at the time of initial public offering (IPO) or shortly after, while employers which have previously only offered share incentive plans (Sips) for staff are now introducing sharesave schemes. In some instances, this is for the first time, in others these are back by popular demand following an employee engagement exercise.
The potential benefits of sharesave schemes are an attractive tool for recruitment and retention.
Plans such as sharesave are an excellent way for employees to save direct from salary, in doing so supporting a savings culture and overall financial education across the board. This is evidenced through the increase in employee participation. Some 1.4 million employees now save into sharesave schemes, an increase from 1.25 million in 2013, according to IFS ProShare’s 2014 Sharesave (SAYE) and share incentive plan (Sip) survey published in July 2015.
Looking forward, it is important that, as an industry, we continue to understand what drives an employee to join an employee share plan (or not), and ensure that we continue to improve the way we bring the benefits alive across all company sectors and engage participants for the longer term.
Box - Key industry trends
- Increase in savings limits for all employee share plans
- Developments in online services
- Increased activity in the initial public offering (IPO) market
- Increased interest in reintroducing sharesave
Box - Industry highlights:
- 1.4 million employees participate in sharesave schemes, up from 1.25 million in the previous year
- The most popular discount for sharesave schemes is 20%
- Average savings for new sharesave grants are up to £107.46, an increase from £86 on the previous year
- 526,605 employees participate in share incentive plans (Sips) offering free shares
- The most popular matching ratio for Sips is one-for-one, offering one matching share for every partnership share purchased.
Source: IFS Proshare, Sharesave (SAYE) and share incentive plan (Sip) survey, July 2015
Ashley Price is head of YBS Share Plans, part of Yorkshire Building Society
