SAYE application period to open

[TrueBlueTerrier]

http://www.myroyalmail.com/news/2014/08 ... eriod-open" onclick="window.open(this.href);return false;

Likely to launch next Monday, 1 September 2014

It is likely that the Save As You Earn (SAYE) scheme application period will open next Monday, 1 September 2014. Eligible employees would then have until 5pm on Thursday 18 September 2014 to apply, if they choose to.

Invitations

Eligible employees are likely to receive their invitation to join SAYE at their home address from Tuesday 2 September 2014. Included in your mailing will be a paper application form.

Eligible employees will also be able to apply by text, freephone and online. It is likely that these application channels will be available from Monday 1 September 2014. Details about how to apply using these channels will be available on http://www.myroyalmail.com" onclick="window.open(this.href);return false;

Before you apply, please read ‘Your guide to Royal Mail’s Save As You Earn scheme 2014’ carefully. This will be included in your invitation mailing and will also be available on http://www.myroyalmail.com/saye" onclick="window.open(this.href);return false;, once the application period opens.

Remember: the share price can go down as well as up. Owning shares is not for everyone. You may want to get independent financial advice about owning shares. Royal Mail and the scheme administrator, Equiniti, cannot provide independent financial advice.

[Himaggen]

Since the markets have closed until 1st September now, it looks as if the share price offered at the end of the saving period will be 357.12

This would allow you to buy a maximum of 1092 shares at the end of the savings term, (based upon a weekly maximum £25 over 3 years).

[koolishy67]

after 3 years share price would be £1.

[spen]

Then you can have your money back and you've lost nothing

[5plusbonusball]

Since the markets have closed until 1st September now, it looks as if the share price offered at the end of the saving period will be 357.12

How do you know they will be 357 a share , I hope it doesnt ever drop below £4 . Sorry just realised the 20% discount.

[wandle]

Since the markets have closed until 1st September now, it looks as if the share price offered at the end of the saving period will be 357.12

This would allow you to buy a maximum of 1092 shares at the end of the savings term, (based upon a weekly maximum £25 over 3 years).

As I understood it, the price upon which the discounted price will be based, is defined by an average of the previous 5 trading days' closing market price. Since August 25th was a Bank Holiday, my calculation would be:

closing prices used for SAYE scheme average

Fri 22 Aug 449.8p
Tues 26 Aug 449.7p
Weds 27 Aug 453.0p
Thurs 28 Aug 449.1p
Fr 29 Aug 446.4p

So, average price over 5 days was 449.6p/share.

IF (and it's a big 'if') the scheme offer document were to allow the maximum 20% discount, that would imply an 'option to buy price' of 359.8p/share. They are NOT, however. obliged to offer a full 20% discount, I'm afraid. It could be 15%, 10%, whatever they see fit. But once the percentage for the scheme is set, it cannot be altered.

A maximum investment of £100 per month (I think that the '£25 per week' quote by Mr Apprentice Guy on RMTV was a dumbed-down 'divide £100 by 4' illustration) would mean that, at the end of three years, you could use your accumulated savings of £3600 to purchase (rather conveniently, for ease-of-calculation purposes) precisely 1,000 shares, at a cost of £3598.00.
What happens to the remaining £2 ? I don't know, but it ain't possible to buy anything other than a whole share

If the share price in September 2017 is lower than 360p, then obviously, you would not exercise the option. You just withdraw your cash.

If the share price in September 2017 has been on a rollercoaster ride, and just so happens to be at around 450p at the end of the scheme, then you exercise the option, get your 1000 shares, and sell them for £4500.

One thing's for sure, you wouldn't get £900 in interest over three years, if you stuck your £100/month in a low-interest-rate savings account

And if the share price has climbed back above £6, you could make £2400 on your £3600 savings, by taking the shares. A 66% return

[5plusbonusball]

Why don't you do that countdown birds job!

[Himaggen]

Why don't you do that countdown birds job!

WARNING
Leave Rachel Riley alone…I mean it!

[glenfiddich]

ooooo Himaggen and Rachel sitting in a tree K I S S I N G

[Bernardson]

It's not a very long application period many people may be on two or three weeks Annual leave.

[arnold cheshire]

Then you can have your money back and you've lost nothing

after 3 years share price would be £1.

then you can get your money back and buy loads at £1 each and wait for them to get back to £6 each what a gamble

[arnold cheshire]

ooooo Himaggen and Rachel sitting in a tree K I S S I N G

hes lucky

[wandle]

It's not a very long application period many people may be on two or three weeks Annual leave.

Unless they live in a cave, they will have known about the SAYE scheme from the information in the Courier / WTLL / RMTV. They will have had the application pack sent to their home address. They can apply online, if they come back from holiday and there is insufficient time to apply by post

[knighty9901]

Alternatively if you are near retirement you could save the money in the Royal Mail AVC and then withdraw the maximum lump sum tax free amount, which is 25%. EG £25 a week for 3 years = 3,900/4 = 975. You will of course need to pay income tax on the remaining 2925 assuming you are a basic rate tax payer.
For me this is preferable especially as I doubt I will be working for another 3 years.
Just to clarify - the money for the share save scheme is deducted after tax has been paid (net), whereas Pension payments are deducted before tax (gross).

[RobertT]

Alternatively if you are near retirement you could save the money in the Royal Mail AVC and then withdraw the maximum lump sum tax free amount, which is 25%. EG £25 a week for 3 years = 3,900/4 = 975. You will of course need to pay income tax on the remaining 2925 assuming you are a basic rate tax payer.
For me this is preferable especially as I doubt I will be working for another 3 years.
Just to clarify - the money for the share save scheme is deducted after tax has been paid (net), whereas Pension payments are deducted before tax (gross).

As the RM pension scheme allows you to take 25% of your total RM pension provision, i.e main scheme plus AVC’s as tax free cash, you may not need to pay any tax at all. And you’ll get a bigger index linked monthly pension too.