Answers · UK 2025/26

How does a SAYE Sharesave scheme work and what are the tax benefits?

SAYE lets employees save GBP 5-GBP 500/month for 3 or 5 years and then buy employer shares at up to a 20% discount to the grant-date price. The purchase gain is entirely free of income tax and NI. Any subsequent rise in share value is subject to CGT. Shares can be moved to an ISA within 90 days.

Last updated: 20 June 2026Last reviewed: 20 June 2026How we verify

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Save As You Earn (SAYE), also called Sharesave, is a government-approved all-employee share option scheme. Employees save regularly then use their accumulated savings to exercise a share option, often at a significant discount. How it works At the start of the scheme, employees are granted an option to buy shares at a fixed price (the "option price"), which can be set at up to a 20% discount to the market price on the date of grant. They then save between GBP 5 and GBP 500 per month into a linked SAYE savings account for either 3 or 5 years. At maturity, the employee uses the savings (plus any interest or bonus) to exercise the option and buy shares at the original option price. If the share price has risen above the option price, they instantly make a gain. Tax treatment The entire gain from buying shares below market value at exercise is free of income tax and National Insurance. This is the key advantage -- with a listed company, the employee can sell shares immediately after exercise and pocket the discount plus any appreciation, all income-tax-free. Subsequent CGT Once the shares are owned, any further rise in value before disposal is subject to CGT in the normal way, using the exercise price as the CGT acquisition cost. The annual CGT exempt amount (GBP 3,000 in 2026/27) applies. ISA transfer Shares acquired through SAYE can be transferred into an ISA within 90 days of exercise, sheltering all future growth and income from tax. What if the share price falls? If the share price falls below the option price, the option is worthless but the employee simply takes back their savings (plus any applicable interest/bonus). The savings are guaranteed -- there is no downside risk of loss. Leaving employment If the employee leaves voluntarily within 3 years, they generally lose the option (though savings are returned). Leavers for certain "good leaver" reasons (redundancy, retirement, death, company takeover) may exercise the option within 6 months of leaving.