Staff share scheme in jeopardy

On the eve of the Budget Chancellor Gordon Brown was being urged not to cut
allowances for employee Sharesave schemes.

Labour wants its own tax breaks for employee share ownership to supplant the
scheme set up by the last government.

This has cast doubt over the future of the existing Sharesave scheme. With
this, employees can put up to £250 a month into a savings account, which can
then be used to buy shares at the price of the account’s opening.

As employees have the option to withdraw the savings as cash, it is a
risk-free option.

Brown wants staff to be true part owners of the company, by buying options
from pre-tax income in a scheme due to come into effect in the summer.

"I expect the £250 monthly limit may be reduced or even halved,"
said Mark Childs, director of global compensation at Fidelity Investments.

• Personnel Today will be providing full Budget coverage in the next issue.

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