I’ve finished a sharesave scheme through work, and now wondering wether to start the next one, or put the £s away as AVCs.  I’m 53, so pensions are beginning to feature in longer term plans.

Is there an obvious answer, or is it a “depends” ?  Thanks

It depends! Is it like a matching program where you buy 2 get one free? Can you predict the share price in future? Is there a vesting period you must keep the shares for?

No easy answer sorry.

I’m not an IFA but…

If the Sharesave has a share price discount that would likely be worth serious consideration.

Your AVCs might be tax-free in terms of contribution but you’ll pay tax on the returns when you retire, as you would with the Sharesave when you cash out any gain. Plus AVCs can have (fund) management fees. Their biggest downside is they are not guaranteed to give a positive return though.

At least with the Sharesave you can just take the contributions back if the share value tanks during the scheme.

IMHO Sharesave for the win.

But ‘it depends’ too.

I don’t know anything about sharesave schemes. If your employer contributes to your AVCs, or you have a final salary pension with a lump sum less than 25% of the total nominal pot, AVCs can be very good. Otherwise I would consider a SIPP.

The potential issue for sharesave is you’re tying up both your employment and also a lump of savings into one company it gets into difficulty you could lose your job AND your savings…

I had friends who worked in RBS were badly burnt when 2009 happened and someone I knew worked in Carrilion when that folded.

<span style=”font-size: 0.8rem;”>How good a discount do you get? You could do sharesave for the minimum amount of time to get the tax advantages, then port the tax free goodies out into an ISA / AVC / Sipp…? Harvest the tax breaks, minimise the risks. </span>

Can’t you join sharesave and then when it matures pay it into your AVC?

The long timers when I worked used to recycle their share save cash, IE, sell and repeat.  I kept all mine, just reinvested dividends.  Still got them 25 years later.  It’s my rainy day fund.

Avc s I did too as company pension was free so I put what I would have put into pension, into AvCs.  Think I ticked the wrong box as it hasn’t done much.

I d spread the risk and do a bit of each, in fact, I should sell my single company shares and buy funds.

I invested heavily in AVCs from the beginning. Always 12% on top of my final salary (since closed). Sharesave allows you to save £250 per month (after tax) and have the option to buy shares at a predefined discount after three years. The £250 per month is the sum of all agreements over all three possible years.

AVCs get tax relief at your marginal rate. Sharesave is just a bet that the shares will increase in value and that the discount is useful (say 20%). Ours don’t seem to go up, and have some years been underwater (you get your money back with modest interest). My view at 53 is put all you can in AVCs, you should be saving at least half your age or 26%. You can take 25% of any lump sum in due course. So it really is tax free at the moment. It’s relatively near-term but not immediately accessible money  for me that’s a good thing

Btw the other tax free shares is bogof Share Reward you buy one and the company gives you up to two free you just hold them five years and can only invest £125 per month. These are always good value (unless share price truly tanks) and paid my sons upkeep at university.  Always invest the full amount

IANAFA. But the rule on saving in your pension still holds.

Are you maxed out on AVCs OP? If so then Sharesave.

I’m 53, so pensions are beginning to feature in longer term plans.

Ah, guess not then 😉

What’s the discount on the Sharesave? Anything good?

I’m on my third sharesave at present. I took the cash on the first two as the shares tanked afterwards. Luckily the third one was at 81p including discount and the shares are trading at 1.84 so I don’t expect to be taking the cash on this one :-))

As Scruff notes above, whatever the tax breaks, with a share save scheme you are adding very specific savings risks to employment risks at a time of life when you probably don’t want to be; best to spread the risk through AVCs.  IANAIFA