Schedule 3 SAYE option schemes: Linkage to savings (Arrangement): Failure to pay contributions
Participants may, at any time, give notice to the savings body that they intend to stop paying their monthly contributions permanently. They are then entitled to repayment in full of their aggregate monthly contributions, plus interest if repayment is taken after the first anniversary of the starting date of their savings contract. The starting date is defined in the Prospectus as the date the employee’s first payment under the savings contract is received by the savings body. Repayment cannot be taken in part only.
Participants, who cease to make contributions, perhaps because they can no longer afford to do so, are not required to take immediate repayment of their savings. They may leave them in the savings contract up to the 3 or 5 year point (as applicable), in which case they:
- will be entitled to tax-free interest on them,
- may (depending on the rules of the share option scheme - see below) be able to use the savings to exercise their option partially at the normal 3 or 5 year exercise point up to the extent of the savings repayment received then.
The rules of a Schedule 3 SAYE option scheme may provide that the premature cancellation of a savings contract, which occurs if the employee permanently stops making monthly contributions, causes the option to lapse (See ).
The 7 year savings feature was abolished with effect from 23rd July 2013 (the revised Prospectus date).