Sharesave (SAYE): Save Monthly, Buy Discounted Shares Tax-Free in 2026/27

A low-risk way into employee shares

Sharesave, also called Save As You Earn or SAYE, is an HMRC-approved scheme that many larger employers offer. It combines regular saving with a tax-efficient option to buy company shares at a discount, and it is designed so that you cannot lose your capital if the share price falls.

For employees who want exposure to their company's shares without the risk of buying outright, it is one of the most accessible tax breaks around.

How it works

You agree to save a set amount each month, between GBP 5 and GBP 500, for a fixed term of three or five years. At the start, the scheme sets an option price for the company's shares, which can be discounted by up to 20% below the market price at that time.

At the end of the term you have two choices:

• Use your savings to buy shares at the fixed option price.
• Take your savings back in cash if you prefer, for example if the market price is below the option price.

The tax saving

The main relief is on the discount. When you buy the shares at the fixed option price, there is no Income Tax or National Insurance on the difference between that price and the market value at the time you exercise. Buying the same shares from taxed salary would give no such relief.

Worked example

Sam joins a five-year Sharesave plan and saves GBP 200 a month, putting in GBP 12,000 over the term. The option price is set at GBP 4 per share, a 20% discount on a GBP 5 starting price.

• Sam can buy 3,000 shares with the GBP 12,000 saved.
• Suppose the market price at the end is GBP 7 per share.
• The shares are worth GBP 21,000, but Sam pays GBP 12,000.
• The GBP 9,000 difference carries no Income Tax or National Insurance.

If Sam later sells the shares, any gain above the GBP 3,000 Capital Gains Tax annual exempt amount could be taxed at 18% or 24% for 2026/27. To avoid this, Sam can transfer the shares directly into an ISA within 90 days of exercising, using the GBP 20,000 ISA allowance, so future growth is sheltered.

The downside protection

Because you can always take your savings back as cash, the scheme protects your capital. If the share price drops below the option price, you simply do not buy. The most you give up is the interest you might have earned elsewhere on the monthly savings.

Things to weigh up

• Maximum saving is GBP 500 a month across all your SAYE contracts.
• The discount of up to 20% is the core tax-free benefit.
• Transferring into an ISA can shelter later gains from Capital Gains Tax.
• Holding too much in one employer's shares concentrates risk.
• This is general information, not financial advice. Check the current rules on gov.uk.

To work out the Capital Gains Tax position if you sell employer shares, use the capital gains and ISA calculators on CalcHub and read the SAYE share scheme guidance on gov.uk.