Save As You Earn share offer

[houseoflords]

I wouldn't put anything into Royal Mail.

[Lounge Lizard]

BT recently finished one after 5 years with some big savers making £42k profit, tescos always does well , can't go wrong at £10 a week , if your skint next christmas you can withdraw your £500 you've saved and close the account or carry on saving as long as you can and hopefully make a profit at the end.
Maybe it will make up for the 25% tax we would pay when our shares mature in 3 years, letting us afford to keep them in for the 5 years and get full lot back?
Worth a punt it's only £10 a week out your pay and it's always safely put away when you need it.

But you're not going to make £42k profit at £10 a week

[5plusbonusball]

no these were the big savers , probably bosses who put in £225 a month, ours is £100 max a month I think, but at say £4.40 a share that's 340 shares if you put in £10 a week so if they fetch £5 a share in 3 years time that's like £200 profit and theyre offering them at 20% less as well, better than saving it in a bank for 3 years.

[barney1983langley]

Cant we take our free shares in three years? If there's a mass selling of shares as postpeople cash in surely the price will plummet just as the SAYE term is up: meaning Royal Mail will be cash rich for the next three years as people who pay in are effectively giving them an interest free loan. Or have I missed something.

[freelunch]

Cant we take our free shares in three years? If there's a mass selling of shares as postpeople cash in surely the price will plummet just as the SAYE term is up

If they foresee the likelihood of a large number of RM employees desperate enough to sell as soon as possible then the market-makers would typically force the price lower ahead of time but generally millions of FTSE100 shares are traded each day so our little tranches of say 600-730 shares wouldn't have a significant impact.

... meaning Royal Mail will be cash rich for the next three years as people who pay in are effectively giving them an interest free loan. Or have I missed something.

Your money is held in a bank/building society account in your name, protected by regulatory guarantee. Royal Mail don't use your cash.

[5plusbonusball]

It does sound too good to be true and there is something in it for them even after they've wasted millions on paperwork but we'll see in september.

[Treacle12]

Most will keep the shares for 5 yrs so an to not pay tax . If share price low at end of SAYE term then just take the cash ,nice savings plan and a chance of making more money . Reckon we will be a much smaller more profitable company in 5 yrs time

[freelunch]

How many interested here? Thinking to put £ 10 a week . What do you think ?

For someone who doesn't currently save regularly it's probably a good idea. £10 a week is a start.

For me, there's a few potentially bad points, being;
i) Royal Mail pays out a large chunk of profit as dividends. You won't receive dividends from shares you may or may not own in three years. And paying out profit to shareholders limits RMGs share price appreciation.
To be getting the most out of a SAYE scheme you want your company to be ploughing profits back into the business, either to expand the revenue base, else in share buy-backs.
ii) The purchase price is being set at a time when shares could be considered overpriced. Here's one line from Elliot Management's ($24.8 billion hedge fund) most recent letter to their clients -
"The apparent stability of the world financial system is superficial – financial asset prices are not real, the equilibrium is temporary, the lack of volatility is a trap, and when the whole thing goes haywire, there will truly be hell to pay."
iii) In the case where the share price makes it unattractive to take up the share offer the Interest rate paid on the savings account isn't going to be great either. Your savings could be losing purchasing value especially if inflation increases further.
More-so since you may have to wait until the end of the qualifying period to receive any interest.

[cazspence]

How many interested here? Thinking to put £ 10 a week . What do you think ?

For someone who doesn't currently save regularly it's probably a good idea. £10 a week is a start.

For me, there's a few potentially bad points, being;
i) Royal Mail pays out a large chunk of profit as dividends. You won't receive dividends from shares you may or may not own in three years. And paying out profit to shareholders limits RMGs share price appreciation.
To be getting the most out of a SAYE scheme you want your company to be ploughing profits back into the business, either to expand the revenue base, else in share buy-backs.
ii) The purchase price is being set at a time when shares could be considered overpriced. Here's one line from Elliot Management's ($24.8 billion hedge fund) most recent letter to their clients -
"The apparent stability of the world financial system is superficial – financial asset prices are not real, the equilibrium is temporary, the lack of volatility is a trap, and when the whole thing goes haywire, there will truly be hell to pay."
iii) In the case where the share price makes it unattractive to take up the share offer the Interest rate paid on the savings account isn't going to be great either. Your savings could be losing purchasing value especially if inflation increases further.
More-so since you may have to wait until the end of the qualifying period to receive any interest.

The stuff recieved today says no interest or bonus will be paid, so if you don't buy the shares you've lost out on 3 years interest you could have had in an ISA

[taxi4leighton]

if you can afford £10 TO £25 a week,this is a great offer
its a free bet
where the odds are very attractive
and you can just take your money back if shares slump in value

[thehobbit]

must all depend on the discount we are offered at the time which we dont know yet .

[Treacle12]

Not much interest in an ISA or anywhere else for that matter . Decent potential profit in Shares and a SAYE scheme eliminates risk as "Potential Profit " is just that ...could be a loss

[dazzlin72]

If you were going to buy shares, you'd have done it already under the share offer, when we were also given the free shares. As mentioned, if you really want a savings plan, get an ISA. To me, this just seems like another RM get rich quick scheme for themselves, not really to benefit the employees at all, look at how much the share price has plummeted since their release, & as our free shares are tied up for another 2 yrs, realistically another 4 without paying any penalties, look at how much money we have already potentially lost out on, if we were able to sell, like the investors who sold up straight away, & doubled their money. This scheme to me, seems very much like the share option the Glazers want to issue, at Man Utd, all the benefits to the issuer, with very little gain to the investor.

[tovadee]

If you sign up to the SAYE scheme but leave the company (resign/dismissed/vr) within the 3 years, do you lose the money that you've put in?

[RTP]

Another option to think about is to look into paying more into your Royal Mail pension. If you pay £10 a week extra then Royal Mail also pay more into it.