The software does not have a facility to directly model SAYE schemes (with stock option purchases). This is an item we have in queue for consideration for future development.
In the meantime you might try modelling the SAYE investments as a savings account on the Savings screen. Whether you place a growth rate on this investment 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.
Tick the “Contribute Before Paying Expenses” check box, which will schedule this contribution as a priority along with regular expenses.
Next, add an event to the timeline to schedule the end of contributions to the SAYE.
Go to the Time panel on the right side of the screen and click the Event tab. Click the New Event button in the bottom-right corner of this panel.
Enter a name for the event (e.g. End SAYE Contributions), select the event owner, and enter the owner’s age, or the year at the time contributions are to end.
This event can later be moved up or down the timeline to extend or shorten the contribution period.
Next, select a start and end event on the Time panel, Event tab, to set the contribution period for the account. If contributions are being made at the start of the plan, select the Start event. A green dot will appear next to the start event. Select as the end event the new “End SAYE Contributions” event. A red dot will appear next to the event, indicating that contributions to the SAYE will end in this year.
NOTE, Contributions will end at the start of the selected event year. For example, if you want contributions to be made through 2013, position the “End SAYE Contributions” event in the following year, 2014, which is when contributions will end.
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.
For example, using the Savings screen’s Withdrawal Limits or Draw Down strategy, set withdrawal limits to be allowed only after the End SAYE Contributions event. Thereafter, allow the software to take Maximum withdrawals only if needed to meet expense. You could set this to any event. This is only an example.
Click the Save button to save your changes.
Check the Let’s See charts, Details, Investments tab. View 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 screen.
Click the year of the “End SAYE Contributions” event. You should see no contributions in this year.
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 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. Select the “End SAYE Contributions” as the year of the windfall. Also expand the Details panel and specify whether this windfall inflow will be grown/inflated, Present Value, or considered in future terms, Future Value, and not inflated. Future value may be the better option.
If you decide to use the second option, you will need to transfer this windfall into your SAYE.
Return to the Savings screen and select the SAYE.
Expand the Transfers / One-time Contributions panel.
Select “End SAYE Contributions” as the transfer event.
Transfer “To This Account” an amount in present or future values, depending on which was chosen on the Windfalls screen. Keep in mind that present values on the Savings screen will be grown using rates set for the savings account, not the windfall.
Enter the Amount to be transferred - the amount of the windfall.
Transfer these funds from Surplus.
Tick “Transfer Before Paying Expenses”.
Click Update 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.