EQ SHAREHOLDER SERVICES | JULY 2025
How Equiniti Supported Lloyds Banking Group To Win Hearts And Minds Of Employees Through Share Plans
Introduction
Lloyds Banking Group is a major British financial institution, with 30 million customers and 66,000 employees (colleagues) and is FTSE 100 listed. The bank has a long-standing commitment to employee share plan ownership, recognising its power of shared success and engagement. Since the 1980s Lloyds Banking Group has offered a range of share plans including discretionary plans for their top management and tax advantaged plans for all colleagues. SAYE (Sharesave) and SIP (Sharematch and Free Shares) provide colleagues with the opportunity to become stakeholders in the company’s growth.
Lloyds Banking Group has recently won two ProShare awards for ‘best overall performance in fostering employee share ownership’ and ‘most effective communication of an employee share plan’.
The judges were deeply impressed by the Group’s long-term commitment to its share plans, and the courage it took to overhaul the plans over the previous year and commended them for their thoughtful and structured approach to share plan communications.
They were also recognised at the Employee Share Ownership Centre’s 17th Newspad Share Plan Awards where the company was highly commended in the ‘best use of technology’ category, for effectively leveraging automation, personalisation and digital tools.
Share plans success
Data for 2024 shows the success of both the all-employee plans.
SIP – Sharematch and Free Shares
Free, partnership, matching and dividend shares. 3:2 match capped at £30 per month. Maximum £150 partnership investment per month.
take-up
average savings per month
Sharesave
3-year savings period. 10% – 20% discount, reviewed
annually, currently 10%. Maximum £500 savings per month.
take-up
average savings per month
The Challenge: Navigating Complexity and Change
Through 2023 and 2024, Lloyds Banking Group faced a set of challenges that took their commitment to colleague support to a new level. Changes to Capital Gains Tax (CGT) and the reduction in the dividend allowance introduced complexities that could impact colleagues' financial wellbeing and understanding of their share plans.
Tax Implications
The reduction in the dividend tax-free allowance and changes to CGT rules required clear communication and guidance to help colleagues understand potential tax liabilities.
Sharesave Maturity
01-Jan-2024
Maturity date
25,756
Participants holding options
48.07p
Share price on 02-Jan-2024
24.25p
Option price
The maturity of the 2020 Sharesave plan presented colleagues with important decisions regarding their shares, with tax implications depending on their choices (for example: transferring to an ISA).
Process Complexity
The processes involved in managing share plans, such as transferring shares into an ISA at maturity, could be perceived as complex or daunting by colleagues.
Dividend Understanding
Colleagues needed clarity on how dividends on their SIP shares are treated for tax purposes, particularly the distinction between receiving cash dividends and reinvesting in dividend shares.
The Solution: A proactive and supportive approach
Lloyds Banking Group adopted a proactive and colleague-centric approach to address these challenges. This involved great collaboration with their Reward, Tax, and IT teams along with staff at Halifax Share Dealing, Schroders Personal Wealth and Equiniti.
Clear and accessible communication
The Group prioritised transparent and easy to understand communications to ensure colleagues were well-informed. This included:
- Explaining the implications of CGT and dividend allowance changes.
- Providing guidance on Sharesave maturity choices and tax considerations.
- Clarifying how dividends on SIP shares are taxed and potential benefits for reinvesting dividends.
- Utilising various channels including online portals, guides, and colleague helplines.
Excellent work on this - the hub pulled together was brilliant and I used it to help many of my colleagues navigate through the process with ease. Fantastic collaboration - well done!"
Francesca, Lloyds Banking Group
The dedicated microsite was designed to include:
Sharesave scenarios – explaining various maturity choices, including selling, and transferring shares.
CGT examples – bringing tax to life!
'How to…’ guides – providing information about opening ISAs and the importance of the 90-day window.
A ‘Money Hacks Vlog’ video was created with Schroders Personal Wealth covering Sharesave, CGT and ISAs.
Anticipating an increase in transfers to ISAs they began planning a year ahead and prior to the beginning of the 2023/2024 tax year. They wanted colleagues thinking about whether existing investment choices would impact their ability to use an ISA at maturity.
I really appreciate all the work these teams put in, from the early comms in March 2023 (as this meant I could make the conscious choice to save all my annual ISA allowance from April onwards for my Sharesave, which I wouldn’t have thought to do otherwise) to digitising the ISA transfer process which I found really easy and quick. Thank you all!"
Lisa, Lloyds Banking Group
Education and Empowerment
Lloyds Banking Group recognised the importance of empowering colleagues with the knowledge to make informed decisions. This involved:
- Educating colleagues about financial tools like Stocks and Shares ISAs and their potential tax benefits.
- Arranging for Schroders Personal Wealth to provide consultation, with advisers giving general tax advice and talking through impacts.
- Providing resources and support to help colleagues understand share plan processes.
Streamlining processes
They focused on simplifying processes to improve the colleague experience. This included:
- Improving the efficiency of transferring shares directly into an ISA. An extended team were engaged with the challenge, resulting in development of end-to-end automation of the ISA opening process, with the online portal enabling colleagues to exercise their option and elect to transfer their shares directly into their HSDL ISA account through one transaction.
- Checking colleague requests to ensure accuracy and compliance.
It was a straight-forward process with clear instructions for next steps. Well done to everyone involved!"
Sirin, Lloyds Banking Group
Collaboration and Partnership
Equiniti played a vital role with:
Data Analysis
Equiniti’s team developed a ‘dividend calculator’ to analyse colleagues SIP holdings and model dividend payments based on varying levels of dividend payments and embedded tax rates. This data was used by Lloyds Banking Group to understand the impact of dividend tax changes and make decisions about updating colleagues and then reviewing the impact.
Share Plan Administration
We were responsible for the core administration of the share plans, including managing colleague accounts, processing transactions, and ensuring compliance with regulatory requirements.
Colleague Support
We provided direct support to colleagues through a dedicated helpline, addressing their queries and concerns relating to the share plans.
Communication Support
We assisted in the communication to colleagues working with Lloyds Banking Group to ensure that they were accurate, timely and effective.
Technical Infrastructure
We provided and maintained the technology platform (the share plans portal) that enabled colleagues to access information about their shareholdings, manage their accounts, and perform transactions.
The Results: Enhancing colleague experience and positive feedback
The proactive and supportive measures implemented by Lloyds Banking Group were met with overwhelmingly positive feedback from colleagues. They expressed appreciation for:
- The clarity and accessibility of the communication.
- The ease of navigating share plan processes.
- The helpfulness of the resources and support provided.
- The overall positive experience of managing their share plans.
Communicating additional information to employees about the benefits of SIP dividend shares resulted in employees switching to a shares’ election, with estimated tax savings over £30,000 per tax year.
The Sharesave maturity saw 75% of participants taking early action with shares allotted in the first two tranches. Within the first month of maturity, 48% of colleagues who exercised their option had chosen to hold shares in their ISA, with the transfer process running smoothly.
Conclusion: Comprehensive Colleague Support
Lloyds Banking Group’s response to the challenges surrounding their employee share plans demonstrates a strong commitment to supporting their colleagues. By prioritising clear communication, education, process improvement and collaboration with key partners, the Group has not only helped colleagues but also reinforced the value of share ownership and fostered a culture of trust and empowerment. This comprehensive approach underpinned by the essential administrative and support services provided by Equiniti, serves as a model for how organisations can effectively support their colleagues and promote their financial wellbeing through share plans.