The Sharesave enrolment window is approaching again in August and September. Here’s how to get around common share plan myths that your colleagues may be used to hearing.
Sharesave is one of the most popular all-employee share plans in the UK with large take-up levels for most companies. But there are always participants who decide not to participate in SAYE and other all-employee share plans.
Here are the top four myths linked to employee share plans that may be stopping your colleagues from joining:
Share plans are too risky
One of the most common myths is that investing in a share plan is very risky. While all investments carry some level of risk, employee share plans often come with benefits that can mitigate or eliminate these risks. For instance, companies might offer shares at a discount, provide matching shares, or implement safeguards such as holding periods that encourage long-term investment. Additionally, employees have the advantage of understanding the company’s performance and prospects better than external investors, allowing for more informed investment decisions. In the UK and Ireland some tax advantages also apply that help mitigate the risk and offer additional bonuses.
Share plans are for high earners
Many employees believe that share plans are designed only for high-level executives or those with substantial income. This myth likely stems from the misconception that only individuals with excess disposable income can afford to purchase company shares. However, many most share plans are designed to allow small and manageable contributions, for example as low as £5 per month, which contributions come out of the employee’s salary seamlessly processed by payroll.
You need to hold shares until you work for the company
There’s a misconception that once you purchase shares through a share plan, you’re locked into holding them forever, or at least until you’re employed by the company. Most share plans have defined holding periods, after which employees can sell their shares. These periods are typically a few years and are designed to align the interests of employees with the long-term success of the company. After meeting these requirements, employees have the flexibility to sell or keep their shares based on their financial goals and market conditions. They can also sell their shares while still with the company.
Share plans are too complicated
The perceived complexity of share plans can be a significant deterrent. Many believe that understanding the mechanics of share purchasing, taxation, and the potential financial outcomes is beyond their capabilities. Helpful brochures, FAQs, explainer videos and microsites help employees better understand the plans the company offers and help them make better decisions for their financial wellbeing.
And this is where we can help you. We specialise in simplifying complex information with a team of skilled copywriters who will translate your message.
Interested? Explore our services and book a discovery call with our team.
