- HMRC commissions London Economics to review employee share schemes - Share Option Plan, Save as You Earn and Share Inventive Plans
- 81% of companies registered for CSOP, SIP or SAYE indicated an improvement in employment and/or business outcomes
- Positive impact more likely on employment outcomes but can also improve employee productivity and sense of connection to the company
- Share schemes can have a positive impact on employee saving behaviour
- AJ Bell CEO calls for reductions in the time shares have to be held in Share Incentive Plans
Michael Summersgill, chief executive of AJ Bell, comments:
“It’s clear from this analysis that staff share schemes can have a direct impact on business performance. As well as the staff recognition and retention benefits, share ownership can encourage staff to think like business owners, creating a highly engaged and productive workforce. We recently launched a new scheme under which staff receive £2,000 worth of AJ Bell shares each year if we hit certain targets and it’s been really well received by our people. For many people those free shares will also become the springboard for them to invest more themselves, with the option to buy more shares through a ‘buy as you earn’ plan, which comes with the benefit of no national insurance and income tax when buying shares from salary – a huge incentive for people to get involved in taking a stake in their employer.
“Share schemes like this are often the first experience people have of share ownership so it can also serve as a catalyst to people getting in to investing and building their long term wealth. The FCA has identified millions of consumers who could be investing but currently miss out. Getting involved in a staff share scheme could be the first step some of those people take in the world of investing.
“Given these positive benefits to companies, their staff and the wider economy I’d like to see the Government reduce the amount of time shares have to be held in Share Incentive Plans from 5 years to 3 years to gain the income tax and national insurance benefits. This would make the benefits feel more tangible for staff as they can access the shares tax efficiently sooner, making these schemes feel like a more important part of their overall remuneration package.”