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Rise in contributions cap 'breathes fresh life' into employee share schemes

Government increases to maximum contributions to Save As You Earn (SAYE) and Share Inventive Plans (SIPs) has led to a large number of employees joining the schemes.

Ifs ProShare, which supports and promotes employment ownership schemes, held its annual Celebrating Excellence awards this week.

Staff taking the opportunity to increase their contributions was one of the top themes discussed at a panel discussion at the event. The other two were self-certification and increased use of digital communication.

John Collison, head of employee share ownership at Ifs ProShare, told HR magazine the cap increase has breathed new life into the area.

“Companies who already have the schemes are using this as a hook to convince more people to join. Companies who have never previously had the schemes are setting them up on the back of this news,” he said.

Collison says the economy is also a factor in the increase of employee uptake. However, some of those who did join during the recession are now reaping the benefits.

“There was one scheme at BT where they bought the shares at around 80 pence each. That’s now coming to maturity and the share price is over £3. So they are pretty wealthy men now,” he said.

Prizes at the Celebrating Excellence awards evening went to technology company Amadeus, which won the Best New Share Plan and ASDA, which took the Most Effective Communication of a Share Plan.

“Innovation in a plan is important," Collison said. "Most will be very similar, but it’s doing something different. Whether that’s giving employees options to interact on social media or something more radical. One company even throws first birthday parties for employees on their plan.”