Sharesave maturity time
Discussion
I'd like some finance savvy peoples opinions on a company sharesave I've been doing for 3 years. I won't quote exact figures, but I've been putting a small amount in a sharesave program each month and they mature later in the month.
I always presumed I'd just sell the shares and take the profit (the company's shares have gone up by about 70p so I stand to make a reasonable return).
However, the company in question is doing well in a very competitive market and I'm pretty confident they'll continue to do well. If I bought the shares, could I continue to watch the share prices and sell in the future when the return would be even more healthy? Call me stupid, but how do you actually sell shares once you own them??
Are there any other benefits to keeping hold of shares in the long term as opposed to just gettiung the short-term rewards and selling straight-away. I don't desperately need the savings/profit freed up for anything.
I always presumed I'd just sell the shares and take the profit (the company's shares have gone up by about 70p so I stand to make a reasonable return).
However, the company in question is doing well in a very competitive market and I'm pretty confident they'll continue to do well. If I bought the shares, could I continue to watch the share prices and sell in the future when the return would be even more healthy? Call me stupid, but how do you actually sell shares once you own them??
Are there any other benefits to keeping hold of shares in the long term as opposed to just gettiung the short-term rewards and selling straight-away. I don't desperately need the savings/profit freed up for anything.
If it is the same as our company sharesave scheme, I think you have 4 options.
1) Take the money you have saved into the scheme back as cash (plus a tiny amount of interest) - doesn't sound like this is the plan for you if the shares have risen over the three years.
2) exercise and sell in a single transaction, you then get a cheque for the amount of money that the shares are worth on the day they are exercised - In our company, you have to do this by post so there is a chance the share price might go down between posting your request and them actually being exercised. In our system the charges for exercising and selling are much higher than they should be so it is a bit of a crappy option....
3) exercise and hold as shares - you get a certificate and you can then put them in your own sharedealing account and sell them at a later date. Again, once you have exercised, then you are at the whim of the market and the volatile share price. If you don't need the money and you believe the share price might go up, then this is possibly an option. This also allows you to control the moment that you sell so that you know what the position is at the point you sell. You can also then find a sharedealing account that doesn't charge an extortionate amount to trade. Some people use iii although I am told they are starting to charge a monthly fee for this, others use their own bank etc... dyor
4) similar to option 1) and take the cash without exercising. you then have 6 months from the maturity date to change your mind. At any point (up to about 2 weeks before the end of the 6 months), you can change your mind, send them back the money and choose to do either option 2 or 3 and exercise and sell or exercise and hold.
They should have sent you a pack explaining these options... Hope this helps...
Bob
1) Take the money you have saved into the scheme back as cash (plus a tiny amount of interest) - doesn't sound like this is the plan for you if the shares have risen over the three years.
2) exercise and sell in a single transaction, you then get a cheque for the amount of money that the shares are worth on the day they are exercised - In our company, you have to do this by post so there is a chance the share price might go down between posting your request and them actually being exercised. In our system the charges for exercising and selling are much higher than they should be so it is a bit of a crappy option....
3) exercise and hold as shares - you get a certificate and you can then put them in your own sharedealing account and sell them at a later date. Again, once you have exercised, then you are at the whim of the market and the volatile share price. If you don't need the money and you believe the share price might go up, then this is possibly an option. This also allows you to control the moment that you sell so that you know what the position is at the point you sell. You can also then find a sharedealing account that doesn't charge an extortionate amount to trade. Some people use iii although I am told they are starting to charge a monthly fee for this, others use their own bank etc... dyor
4) similar to option 1) and take the cash without exercising. you then have 6 months from the maturity date to change your mind. At any point (up to about 2 weeks before the end of the 6 months), you can change your mind, send them back the money and choose to do either option 2 or 3 and exercise and sell or exercise and hold.
They should have sent you a pack explaining these options... Hope this helps...
Bob
Cheers Bob, yes I do understand all the options I have available. What I was getting at was would it be a bit smarter to buy my shares and watch the share price for a while and sell at a later date? Might make a little bit more that way, assuming the share price keeps climbing of course.
vrsmxtb said:
Cheers Bob, yes I do understand all the options I have available. What I was getting at was would it be a bit smarter to buy my shares and watch the share price for a while and sell at a later date? Might make a little bit more that way, assuming the share price keeps climbing of course.
It depends on the company. Ie its a gamble. It might or might not pay off. How would you feel if you lost the lot?I'm in a similar position. I won't name my employer or how much I have bought/currently buying in shares.
In a similar way, I am sure that all three year share options are taxable income.
I enter into a new share save scheme every yer which hurts for the first 5 years until I start seeing a return.
By taking on a five year plan it is tax free and there's also some bonus additional benefits.
I'm now 3 1/2 years into my first one so nothing has payed off yet but my first year options were £7.23 and the current share price is £15.90. So around 70% of time gone I've more than doubled my money- if the current trend continues I will see almost a 200% return.
If I were in your position I'd consider the following....
The shares have grown by around 70p (unsure how that looks in % terms), do you see it continuing or are there factors that may lead to your shares losing value?
The bigger picture out there is, If the euro collapses then just about every market will go into free fall.
Do you need the money, or will using some of it- I.e the money you invested be useful...will it reduce your mortgage or pay off credit cards etc...
Look at it from a total finance view.
For me, I will be delighted if my first share save matures and the share price is level or above what it is now.
My employers are investing heavily and making huge growth in developing markets which is growing bottom line profit ever more every year. I would expect it will rise to around £17 by end of the year.
In a similar way, I am sure that all three year share options are taxable income.
I enter into a new share save scheme every yer which hurts for the first 5 years until I start seeing a return.
By taking on a five year plan it is tax free and there's also some bonus additional benefits.
I'm now 3 1/2 years into my first one so nothing has payed off yet but my first year options were £7.23 and the current share price is £15.90. So around 70% of time gone I've more than doubled my money- if the current trend continues I will see almost a 200% return.
If I were in your position I'd consider the following....
The shares have grown by around 70p (unsure how that looks in % terms), do you see it continuing or are there factors that may lead to your shares losing value?
The bigger picture out there is, If the euro collapses then just about every market will go into free fall.
Do you need the money, or will using some of it- I.e the money you invested be useful...will it reduce your mortgage or pay off credit cards etc...
Look at it from a total finance view.
For me, I will be delighted if my first share save matures and the share price is level or above what it is now.
My employers are investing heavily and making huge growth in developing markets which is growing bottom line profit ever more every year. I would expect it will rise to around £17 by end of the year.
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