How to enter a Save-As-You-Earn (SAYE) Scheme - UK

The software does not have a facility to directly model SAYE schemes (with stock option purchases). 

You might try modelling the SAYE investments as a Savings Account or an Unwrapped Investment (Dashboard > '+' button > Savings & Investments). Whether you place a growth rate on this account depends on how you want to calculate the underlying return. More about this in a moment.

If you have made any previous purchases under this program, use these as the account’s current balance. Otherwise, set the current account Balance to £0.

Enter an annual Contribution amount - e.g. £900. 

Navigate to Timing, on the left of the screen, to set the contribution timing. You will need have  start and end events (e.g. End SAYE Contributions event) on the timeline to schedule the contributions. These events can later be moved up or down the timeline to extend or shorten the contribution period.

You may also want to consider (and this is optional) setting a Withdrawal Limit on the SAYE at least until the contributions end. Cash accounts, such as savings, are usually the first source of liquid assets the software will draw upon to prevent any shortfalls in the plan if cash income does not meet expenses within a given year.

Click the Done button to save your changes.

Check the Let’s See chart > Year View > Investments tab. View the details for the years leading up to the “End SAYE Contributions” event. You should see planned contributions being made to the SAYE in the amount that was entered on the Savings/Investment screen.

Will the client be making stock option purchases with the SAYE?  The tricky part of this will be how to then account for what the value of the purchased options will be in X number of years - e.g. 3 years. You may know the cost of buying the shares, but not what their value will be in 3 years time.

You have two options.

Option 1. The Savings/Investment  account could be set to grow to achieve what would be the projected value.

Option 2. Enter the share value, minus their purchase price as a windfall on the Windfall screen. This windfall will create a tax free cash inflow into the plan. In Timing select the “End SAYE Contributions” as the year of the windfall. 

If you decide to use the second option, you will need to transfer this windfall into your SAYE.

Return to the Savings/Investment from Dashboard screen and select the SAYE account

On the left hand side select Transfers > Add a Transfer

Select Transfer To (this account) 

For the Transfer From source > select All Surplus

Then complete the remaining fields. You may wish to choose Transfer before Paying expenses

Select Recurring > No

Then in Timing select “End SAYE Contributions” as the transfer event.

Click Done to save your changes.

Check the Let’s See chart details. In the year of the “End SAYE Contributions” event you should see a windfall, if you chose to enter the stock value using a windfall.

If you used the windfalls approach, the Investments tab should show a planned contribution to the SAYE in the amount of the windfalls. Withdrawals from the SAYE may also begin in this year, if needed, if you set withdrawals to be allowed starting with the “End SAYE Contributions” event.