SAYE is a savings vehicle for employees of companies which operate savings related share option schemes that are HM Revenue & Customs approved to a model set by the Treasury.
The company offers its employees the option to buy shares in the company at a future date. The option may be granted at a discount of up to 20% of the current share price.
The employee then saves between £5 and £250 per month out of net pay on a 3 or 5 years saving contract. The 7 year contract allows savings for 5 years then the employee leaves the contributions in for a further 2 years. When the contract matures, a tax free bonus is received. The employee can then choose either to exercise the option to buy the shares with the proceeds from the savings contract (there is no obligation to purchase), or just to take the proceeds and the bonus.
The bonuses are equivalent to fixed rate interest and are set by Her Majesty's Treasury. No Income Tax or National Insurance Contributions are incurred on the granting or exercising - there can be an Income Tax charge on exercise if this occurs within 3 years of grant in circumstances other than redundancy, retirement, injury, disability or death - of options.
SAYE schemes are operated for companies by banks, building societies, or European Authorised Institutions which must first be authorised by the Treasury to operate.
Yorkshire Building Society is one of the largest building societies in the UK. We offer a range of financial products and services including: savings & investment accounts, insurance products, credit cards, loans, mortgages and more.
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Yorkshire Building Society is authorised and regulated by the Financial Services Authority (FSA).
