SAYE application dates:1 September 2014 - 1 December 2017

[POSTMAN]

https://www.myroyalmail.com/news/2014/0 ... tion-dates" onclick="window.open(this.href);return false;

Unlike the Free Shares Offer, you will need to apply (opt in) to join SAYE. It is entirely up to you whether you want to join. The scheme is voluntary.

Here are some proposed key dates. If the dates change, you will be told.

1 September 2014
Application period opens. We will send eligible employees an invitation with details of how to apply

18 September 2014
Application period closes

25 September 2014
Grant date

End October 2014
Option certificates sent to those taking part in SAYE

November 2014
Deductions start from net pay for those taking part in SAYE

Week beginning 31 July 2017
Saving deductions from your net pay stop if you are paid weekly (unless you take a payment holiday - see jargon buster).

31 October 2017
Saving deductions from your net pay stop if you are paid monthly (unless you take a payment holiday - see jargon buster).

1 December 2017
Savings term ends (unless you take a payment holiday). You will then have six months to use your savings to buy shares at the option price, if you choose to.

Further details

Further details on how the SAYE scheme will work and how to apply will be included in the invitation that will be sent to all eligible employees, if the scheme goes ahead.

Questions

If you have any questions about Royal Mail’s SAYE scheme, you can call the Royal Mail Employee Shares Helpline free* on 0800 012 12 13. Lines are open 8.30am to 5.30pm, Monday to Friday (not including UK bank holidays).

Alternatively, why not go to myroyalmail.com and log on to Live Chat to speak to a share scheme expert? Experts will be on hand to answer any queries from 8.30am to 5.30pm, Monday to Friday (not including UK bank holidays).

To access Live Chat you will need your myroyalmail.com username and password. If you have not yet registered for myroyalmail.com, doing so is quick and easy. You will need your Payroll number and an email address. You can find your Payroll number on your payslip.


*Calls are free from a BT landline, but other network providers may charge.

[POSTMAN]

https://www.myroyalmail.com/news/2014/0 ... arn-launch" onclick="window.open(this.href);return false;

Shareholders have approved a Save As You Earn (SAYE) scheme for employees at last week’s Annual General Meeting.

This scheme is voluntary. Whether you decide to join is entirely up to you.

What is a SAYE scheme?

A SAYE scheme is a voluntary tax-efficient cash savings scheme. It gives you the option in the future to buy shares in the company you work for.

For a fixed period, you save a fixed amount direct from your net salary every time you are paid. This is called the savings term
At the end of the savings term, you can choose to buy the company’s shares at a discounted price, using your savings.
The discounted price is set by the company and will be based on our share price when the scheme is launched. The discount will be a maximum of 20%. We will tell you the discounted price in your invitation, which you are likely to receive at the beginning of September 2014.

Who is eligible?

The overwhelming majority of full-time and part-time Royal Mail Group Limited employees are eligible.

More information

A summary of SAYE schemes and key details of Royal Mail’s SAYE scheme will be landing at homes shortly.

Nick Hewer will present a special RMTV programme looking at Royal Mail’s SAYE scheme in the coming weeks.

And, if the scheme goes ahead, you will receive full details in your invitation.

[DavidUK]

SAYE schemes such as this are a no brainer.You cannot lose. At the end of the period you can purchase shares at the price three years ago, or simply receive the cash you have saved in the unlikely event the SP is lower than three years ago.

[wandle]

SAYE schemes such as this are a no brainer.You cannot lose. At the end of the period you can purchase shares at the price three years ago, or simply receive the cash you have saved in the unlikely event the SP is lower than three years ago.

Strongly agree with you there, DavidUK.

Let's say the scheme starts in September 2014, and the share price is at 440p at the launch of the scheme.

You save, say, £10 per month for three years, giving you a savings pot of £360.

The SAYE scheme rules give you the option to buy shares at 352p per share, a 20% discount to the September 2014 price.

If the doom-merchants are correct, and the share price in September 2017 is languishing below that figure, you simply withdraw your savings i.e. NO PROFIT / NO LOSS

If the share price has rollercoastered over the three years, but just so happens to be hovering at around 440p in September 2017, you gain.
At the option price of 352p, £360 buys you 102 new shares (the nearest whole number of shares purchasable, allowing for 0.5% Stamp Duty).
Those 102 shares have an immediate value of £448.80, because the share price in the market stands at 440p
A PROFIT OF £48.80 (a gain of 24.66%).

Now let's look at the effect if, over the 3 years of the scheme, the share price recovers from it's present-day levels. Sentiment in the City improves, the company's share price returns to highs of yesteryear, and hits a new high in September 2017, nudging 620p. Why on earth would you not exercise your option to buy 102 new shares, at a price of 352p ?
Those 102 shares would immediately be worth £632.40, because the share price in the market stands at 620p, an eye-watering PROFIT OF £272.40 (a gain of over 75% on your savings)

[TrueBlueTerrier]

Am I eligible? http://www.myroyalmail.com/am-i-eligible" onclick="window.open(this.href);return false;

The overwhelming majority of full-time and part-time Royal Mail Group Limited employees are eligible to join SAYE, if they want to.

Employees must be continuously employed by Royal Mail Group Limited for at least three months before the SAYE scheme is launched and still be employed on the grant date (see jargon buster).

It is likely that eligible employees will be sent an invitation at the start of September 2014. This may change, in which case you will be told.

Remember: the share price can go down as well as up. Share ownership 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.

[RobertT]

I’m not disagreeing with either DavidUK or wandle but there are few points I’d like to make:
1)

If the share price has rollercoastered over the three years, but just so happens to be hovering at around 440p in September 2017, you gain.
At the option price of 352p, £360 buys you 102 new shares (the nearest whole number of shares purchasable, allowing for 0.5% Stamp Duty).
Those 102 shares have an immediate value of £448.80, because the share price in the market stands at 440p
A PROFIT OF £48.80 (a gain of 24.66%).

I’m sure that’s just a typo but it’s actually a profit of £88.80.

2) The 20% reduction is the maximum discount allowable and obviously if they chose to offer a lower percentage reduction then that becomes less attractive.

3) SAYE schemes enable the company that runs it or probably to be more precise, the bank where you money gets saved into, to pay interest and/or a bonus(at the end of the 3 years) tax free. The RM scheme doesn’t seem to offer any interest on the savings at all. Their statment ’ In line with current rules set by HM Revenue & Customs, there will be no interest or bonus paid at the end of Royal Mail’s savings term’, doesn’t seem to fit in with what I’ve read on the HMRC website.
So if that's the case, when you factor in inflation, your money is actually going down in value. Based on the current 1.9% inflation rate, over 3 years that’s a 5.60% drop in value on the money being saved. And that will obviously impact on any profit made.

[wandle]

I’m not disagreeing with either DavidUK or wandle but there are few points I’d like to make:
1)

If the share price has rollercoastered over the three years, but just so happens to be hovering at around 440p in September 2017, you gain.
At the option price of 352p, £360 buys you 102 new shares (the nearest whole number of shares purchasable, allowing for 0.5% Stamp Duty).
Those 102 shares have an immediate value of £448.80, because the share price in the market stands at 440p
A PROFIT OF £48.80 (a gain of 24.66%).

I’m sure that’s just a typo but it’s actually a profit of £88.80. correct!

2) The 20% reduction is the maximum discount allowable and obviously if they chose to offer a lower percentage reduction then that becomes less attractive. The thing that would, for me, govern whether I take the money at the end of the scheme, or take the shares, would be: will I make a profit by taking the shares? (The %age discount will be known in advance, as it will be published in the invitation document). There are a multitude of scenarios that could play out, including one where the share price in 2017 is substantially above today's (depressed) share price. Even at today's closing price of 420p, a 10% discount would allow you to purchase shares at 378p (as opposed to 336p with the maximum scheme-rules discount). If the share price were to be, say, 620p in September 2017, would I cry over making a profit of 'only' 242p per share, when the maximum discount would have increased that to 284p per share? Hardly! I would be more than happy to have a 64% return on my savings !

3) SAYE schemes enable the company that runs it or probably to be more precise, the bank where you money gets saved into, to pay interest and/or a bonus(at the end of the 3 years) tax free. The RM scheme doesn’t seem to offer any interest on the savings at all. Their statement ’ In line with current rules set by HM Revenue & Customs, there will be no interest or bonus paid at the end of Royal Mail’s savings term’, doesn’t seem to fit in with what I’ve read on the HMRC website.
So if that's the case, when you factor in inflation, your money is actually going down in value. Based on the current 1.9% inflation rate, over 3 years that’s a 5.60% drop in value on the money being saved. And that will obviously impact on any profit made.

Even if the scheme paid interest, do you really believe it would be at an inflation-matching 1.9% ? Interest rates on the High Street have never come close to keeping pace with inflation. Your savings would go down in real terms anyway!

[DavidUK]

Even without a 20%discount it's something that all staff should do if they can afford it. Schemes such as these are highly valued in the private sector.If the SP has risen over three years you gain.... if it has fallen you don't lose.
It's best to start one every year and after three years you'll have an option maturing every year thereafter and can accumulate a very healthy stock holding at hopefully far less than it actually cost you.

[RobertT]

2) The 20% reduction is the maximum discount allowable and obviously if they chose to offer a lower percentage reduction then that becomes less attractive. The thing that would, for me, govern whether I take the money at the end of the scheme, or take the shares, would be: will I make a profit by taking the shares? (The %age discount will be known in advance, as it will be published in the invitation document). There are a multitude of scenarios that could play out, including one where the share price in 2017 is substantially above today's (depressed) share price. Even at today's closing price of 420p, a 10% discount would allow you to purchase shares at 378p (as opposed to 336p with the maximum scheme-rules discount). If the share price were to be, say, 620p in September 2017, would I cry over making a profit of 'only' 242p per share, when the maximum discount would have increased that to 284p per share? Hardly! I would be more than happy to have a 64% return on my savings !

My point really(probably not well put) was that RM seem to be proposing operating a scheme that will not meet approved HMRC standards, i.e does not offer interest or final bonus. That in turn obviously does make it a little less attractive however large any potential profits may be.


3) SAYE schemes enable the company that runs it or probably to be more precise, the bank where you money gets saved into, to pay interest and/or a bonus(at the end of the 3 years) tax free. The RM scheme doesn’t seem to offer any interest on the savings at all. Their statement ’ In line with current rules set by HM Revenue & Customs, there will be no interest or bonus paid at the end of Royal Mail’s savings term’, doesn’t seem to fit in with what I’ve read on the HMRC website.
So if that's the case, when you factor in inflation, your money is actually going down in value. Based on the current 1.9% inflation rate, over 3 years that’s a 5.60% drop in value on the money being saved. And that will obviously impact on any profit made.
Even if the scheme paid interest, do you really believe it would be at an inflation-matching 1.9% ? Interest rates on the High Street have never come close to keeping pace with inflation. Your savings would go down in real terms anyway!

No it probably wouldn't match 1.9%, but at least if interest was paid, savers wouldn’t lose as much value.

[RobertT]

Even without a 20%discount it's something that all staff should do if they can afford it. Schemes such as these are highly valued in the private sector.If the SP has risen over three years you gain.... if it has fallen you don't lose.
It's best to start one every year and after three years you'll have an option maturing every year thereafter and can accumulate a very healthy stock holding at hopefully far less than it actually cost you.

RM are only proposing doing it once.
https://www.myroyalmail.com/saye-benefits" onclick="window.open(this.href);return false;

[feduppostie]

http://www.dailymail.co.uk/news/article ... 1-1bn.html" onclick="window.open(this.href);return false;

might well be worth a punt long term

[Chimps_tea_party]

Based on colleagues' reactions to past WTL&L videos regarding the free share scheme, I predict a lot of people will be baffled by the more complex rules affecting this proposal.

[datasaint]

http://www.dailymail.co.uk/news/article ... 1-1bn.html

might well be worth a punt long term

BT's share price was a lot lower to begin with though. I hardly think RM's price is going to quadruple in three years, I would have thought with falling mail + competition it's going to fall if anything.

[Chimps_tea_party]

I tend to agree, norm.

[Indy]

SAYE schemes such as this are a no brainer.You cannot lose. At the end of the period you can purchase shares at the price three years ago, or simply receive the cash you have saved in the unlikely event the SP is lower than three years ago.

You cannot lose..... How would getting the money you paid in back be better than having put it in a cash ISA and getting 3 years interest Tax free?

A base share price of £3.30 (launch price) might be a good deal but at the current price I'm not so sure.