For the first time in a generation the government has raised the share scheme limit as George Osborne made the dramatic move of doubling the maximum monthly amount one can save from £250 to £500.
He also increased the Share Incentive Plan limits on partnership and free shares as well as the matching element. This is the first rise since SIP was created by Gordon Brown over 13 years ago.
As I predicted in my last blog, the Government finally listened to the proponents of share schemes and much credit goes to bodies such as IFS/Proshare, ESOP centre and other bodies which have lobbied for this on a consistent basis.
HMRC figures show that the share scheme market has stagnated over the past five years as the value of the reliefs in real terms has been eroded by inflation. Whilst all political parties have publicly supported the principle of wider share ownership, it is to the credit of the coalition that they have acted to demonstrate their support.
The dramatic increase in relief available may prove to be a tipping point which makes the adoption of these share schemes the normal remuneration policy and that those that do not adopt them will be the exception. Coupled with the simplification measures in setting up share schemes I foresee a vast expansion in the number of employees participating.
