Autumn Statement 2013: The government has announced that it will increase the limits for share plans from April 2014.
The limits on sharesave schemes will double from £250 a month to £500.
In addition, the maximum value of shares an employee can acquire with tax advantages through share incentive plans (Sips) will increase by £300 a year to £1,800 for partnership shares and to £3,600 a year for free shares.
Phil Hall, special adviser to IFS Proshare, said: “This is absolutely fantastic news.
“Millions of employees will benefit from being able to save and invest more for their own futures, thousands of employers will benefit from all the associated benefits that come from increased employee participation in share schemes and ultimately the UK economy will benefit overall.”
There are real advantages for encouraging employees to directly benefit from the success of their employers so the doubling of the tax-free limit by the government is great news.
Almost a quarter (23%) of the 170,000 employees who currently save through schemes managed by YBS Share Plans are at their limit of what they can save, so this is a very positive move by the government.
We would expect a large proportion of people to increase the amount they save through their salary when these changes take effect in April next year.
Many people who do benefit from the success of their employers would otherwise not have put aside money for the future without the ease of saving money from their salary every month, which is why this significant increase in the amount that can be saved will be so valuable.
The Chancellor’s changes to Sip and [sharesave] limits can help millions of employees save more, add wealth and contribute to the success of their businesses.
They may have been a long time coming, but they are all the more welcome for that.
It is great news that the government continues to make it attractive for employers to provide shares to employees, especially given the evidence that these organisations often perform better. The increases to the annual tax-free limits for the share incentive plan (Sip) and [sharesave], which are favoured by a significant number of UK organisations, will make a big difference to a significant number of UK employers and workers. The changes will be particularly welcomed following the cuts to pension relief over recent years.
The current limits had been in place for many years so the increase, especially for [sharesave], is long overdue and is to be welcomed. However, there is no increase to the £30,000 limit for options granted under a company share option plan (Csop).