What is Save As You Earn (SAYE)?

Full Definition

Save As You Earn (SAYE), also called Sharesave, is an HMRC-approved share scheme that lets employees save a fixed monthly amount over three or five years and then use the proceeds to buy shares in their employer at a price set at the start - which can be discounted by up to 20% of market value. You commit to a regular deduction from net pay into a savings contract; at maturity you can either take the cash saved or exercise the option to buy shares. If the share price has risen, the discounted fixed price can deliver a meaningful gain. A key attraction is the tax treatment: there is no Income Tax or National Insurance on the difference between the option price and market value when you exercise. Any later gain on selling the shares may be subject to Capital Gains Tax, though for 2026/27 the Annual Exempt Amount is GBP 3,000 and transfers into an ISA or pension within set time limits can shelter gains.

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