1. High risk fund backed pension. Probably will decline in value due to fund saturation.

2. Low risk fund backed pension. You pay more in yearly fees and decline in value.

I killed mine dead. Stupid idea.

If base rate was higher, perhaps but its a stupid stupid idea now.

And saving tax now at 40-50% and only paying standard rate later is a no brainer and if you can do it via salary sacrifice and get some or all of the NI added to the pensions

It's entirely crazy. I just asked for more cash and chucked the money on the commodities market. My portfolio is worth 178% what it was 12 months ago. Sod tax. Sod pensions.

That cash goes into house. That house I live in. Better interest rate. Sell when the kids have moved out. Live off cash, dumping bits of it in various other investments to avoid inheritance tax in the future.

The tax relief was nullified instantly by the discussion with my employers that sort of went "give me another £10k or I go work somewhere else".

Meh.

I don't actually have a problem paying tax. I've learned to consider my income after tax, not before. Maximising the difference is easier through getting the initial captial larger than it is reducing the difference and doing the associated paperwork (and periodically getting buggered by HMRC). I can still move up another £30k if I want to but the current place is convenient.

The main differences are that for approved schemes HMRC doesn't screw you like the IRS does and if you leave early you can exercise your options and the is far less chance of being diluted.

SAYE allows the employer to deduct upto 225 GBP a month (pre tax) from the employees salary and put it into an investment scheme that ties that money into a share options plan.

The shares have a set value at the entry into the scheme and the company "allocates" an amount of shares based on the end savings projects for that period.

At the end of the period when the options mature you can decide to cash out get your "deposit" + a proportional revenue from the shares maturation value, or to buy out the option at the set price and own the shares fully.

The payout out, the control over the stock, and some other factors are quite different than just a simply option scheme when a company allows employees to buy option/shares or gives it to them as pure compensation.

Basically the best way to describe SAYE is like an ISA/401K but one which the employer controls, and also greatly benefits from.

Now don't get me wrong SAYE schemes especially for low paid employees in freshly privatized organizations can yield good payouts, not always, but they usually do especially when the organizations are too big to fail like BT. It also allows companies in industries which are barred from regular employee share/options like banks for example to grant employees a share investment plan. But it's not some magic nifty employee empowerment plan, it's much more beneficial to most employers than it is to employees.

And BT does have other share schemes I know as my PM got some as a bonus for his work for the millennium dome - these tend to be kept quiet in fact my pm though it was a joke by some of v senior mates

Basically BT gave you a very wierd option, the strike price is granted when you enter the SAYE contract e.g. 2010, but the actual share option is given when the contract matures 2013/2015.

To put it in a more simple term, SAYE is a fancy "ISA", basically some one in the British government figured it out that most employees cannot buy into stock options at any reasonable strike price, SAYE only allows you to give a discount of 20% from the stock price on contract entry. After 3/5 years you get a lump sum which you saved + the interest rate and a bonus which is derived from the tax allowance SAYE savings. You can use that bonus to exercise the option you got based on the strike price you had 3 or 5 years ago if the difference is good enough and you buy the stocks and sell them you might get a very nice amount which you pay capital gain tax on, if there's not much difference or the stock price is lower than the option strike price well then you pretty much saved about as much as you would in your minimal interest cash ISA.

What you'r PM got i think is SIP, Share Incentive Plan it's another approved scheme that allows companies to grant company stock to employees, it's works very differently than SAYE. No fixed rate, no tax free bonus, it's taxed as income tax yada yada.