- Five-year Sharesave schemes return 70%; three-year schemes grow by 44%
- FTSE 100 and FTSE 250 either flat or see single-digit growth over same periods
- 28% of five-year schemes more than double in value
New research from Equiniti, the UK’s leading provider of employee share plans, finds that Save-As-You-Earn (or Sharesave) plans which matured in 2018 considerably outperformed FTSE 100 and FTSE 250 trackers over the same period.
The schemes make it accessible and attractive for employees at all levels of a business to invest in the company they work for. As well as recent stellar returns, participants benefit from a reduced tax bill as well as being able to withdraw their full savings should the share price drop.
Five-year Sharesave schemes generated returns of 70% while in contrast the FTSE 100 remained flat (0% growth) over the period and the FTSE 250 only made gains of 10%. Schemes with a three-year term returned 44% to employees – during which time, the FTSE 100 grew by 8% and the FTSE 250 remained flat.
Over a quarter (28%) of five-year schemes more than doubled in value plus one in ten (9%) of those investing in three-year plans made triple figure gains through the saving period. The recent bumper performance of the plans has left thousands of employees with potentially significant cash reserves at maturity.
Graham Bull, Managing Director of All Employee Share plans at Equiniti said,
“This performance over the past five-years comes in stark contrast to the current low interest rates offered by other savings accounts.”
“Sharesave schemes are a great option for employees to take their first steps in the world of investment. People can save as much as they are comfortable with between £5 and £500 a month and they are simple to join through their employer with savings deducted direct from net pay.”
“Participants have the safety net of getting back their savings in full if the share price falls. This makes them a truly safe investment and often acts as a gateway into longer term planning, promoting financial awareness and wellbeing in the workplace.”
“Share plans are also good for the companies that set them up. Participants are often more engaged with their employer’s fortunes which creates greater staff loyalty and an extra incentive for new hires.”
For more information:
Temple Bar Advisory
William Barker / Sam Livingstone
Tel: 078 2796 0151 / 077 6965 5437
Notes to Editor:
Equiniti Group plc is a FTSE-listed share services and fintech business, delivering technology-enabled solutions to some of the world’s best-known brands and UK’s largest public-sector organisations.
It is the UK’s leading provider of share registration, employee share plans, and associated investor services, and also has market leading positions in pension administration and software, and employee benefit schemes.
Equiniti’s services, which are delivered by over 5,000 employees, benefit 28 million people in the UK and 120 countries around the world.
Equiniti is the number one provider in the UK employee share plans industry receiving employee contributions of over £700 million each year, operating plans in 120 countries worldwide and handling 1.2 million employee accounts. This includes providing share plans for 40% of FTSE 350 companies with the number of clients eligible employees ranging from 30 to 300,000 employees.