Overview of the Sharesave Scheme

A Sharesave scheme is a type of investment vehicle that is available for residents of the United Kingdom. This type of investment strategy provides investors with some significant benefits when compared to other methods of investment. Here are the basics of the Sharesave scheme and how it works. 

Sharesave Scheme

The Sharesave scheme is an investment plan that individuals can access through their employer. With this type of plan, the employee will be able to set aside a certain amount of money every month towards the purchase of company stock. The employee can choose to set aside money for three, five years or seven years. At the end of the term, they can use the money that they have set aside to purchase shares of stock in the company.

Price

One of the big advantages of this plan is that employees can purchase stock at the price that it was when they began saving. In fact, many companies also give a 20 percent discount on top of this price. In this way, an employee can make a large return on their investment. They will be able to take advantage of any gains in the price of the stock while they are saving without any risk.

For example, let's say that you worked for a company that had a stock price of $5 per share. You started this plan and decided to put away $50 per month towards the purchase of the stock. After three years, you would have put aside $1800. You would then be able to buy $1800 worth of shares at $5 per share. This gets you 360 shares. Now, let's assume that over the last three years, the price of the stock has doubled to $10 shares. This would mean that you made $1800 without actually investing in the stock until now. 

Cash

The other option that you have with the Sharesave scheme is to take a cash distribution from your account. For example, if the price of your stock decreased over the last few years, it may not make much sense to go ahead and purchase the stock. In that case, you might want to consider taking the cash and using it for something else. The cash that you take will be taxed, so check with your accountant before you decide to cash it out.

Advantages

Using this type of plan can provide you with a number of benefits as an employee. First, you will get the benefit of being able to purchase stock at a significant discount from the market price. This allows you to make an instant profit once you buy it. You can then hang onto the stock or sell it immediately for a profit.

The other advantage of this plan is that you are going to be able to put your money into an account that provides you with a tax-bonus. The account will pay a certain percentage of interest on the money that is deposited into the account. 

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