Restricted Stock Units, or RSUs, are a form of compensation that companies use to incentivise employees. They represent a promise to give you shares (or the cash equivalent) at a future date, once certain conditions, usually time-based (like staying with the company for a specific number of years), are met. This is known as 'vesting'.

How do RSUs work in the UK?

1. Grant: Your employer grants you RSUs, but at this stage, you don't own any shares. You only have the promise of receiving shares in the future.

2. Vesting: RSUs follow a vesting schedule. For instance, a common vesting schedule is 25% each year over four years. This means if you were granted 100 RSUs, 25 of those RSUs would convert into actual shares at the end of the first year, another 25 at the end of the second year, and so on. However, upon each vesting event, you'll need to pay tax before you can fully benefit from these shares.

3. Tax Implications: when RSUs vest, they're treated as income. You'll pay Income Tax and National Insurance Contributions on the market value of the RSUs at the time of each vesting. The tax is often collected by selling a portion of the vested shares, which covers the tax due. This process is commonly referred to as "sell to cover."

4. Selling: Once your RSUs have vested and you've paid the necessary taxes, you can decide to hold onto the shares or sell them. If you sell the shares, any increase in value from the vesting date could be subject to Capital Gains Tax, depending on your overall capital gains for the tax year.

RSUs can be a valuable part of your compensation package, especially if the company's share price grows. However, the tax implications can be complex. It's essential to consider the timing of vesting and the impact each vesting has on overall earnings.

Navigating the complexities of RSUs and their tax implications can be daunting. As financial planners we can provide guidance on maximising the benefits of RSUs within the broader context of your financial goals. If you'd like a deeper understanding or assistance in managing your RSUs, contact us to discuss your situation further.

This is a very common question. To question of whether you're saving enough is multi-faceted and depends on various factors: your current age, your retirement goals, your current savings rate, other financial commitments, and your desired lifestyle in retirement.

To truly determine if you're saving enough, consider meeting with us to create a comprehensive financial plan. This plan will not only evaluate your current saving habits but will also provide a roadmap for future decisions to ensure you meet your financial objectives. If you're interested in creating a more secure financial future, we invite you to reach out and begin this essential conversation.

Consolidating your pensions means combining multiple pension pots into a single one. This can make it easier to manage your savings and might offer better value regarding fees.

However, there are potential downsides. Some pensions, especially older ones, might have valuable benefits or guarantees that you could lose upon consolidation. It's also essential to be mindful of any exit fees from your current pensions.

We can assist by reviewing your existing pensions and advising on whether consolidation fits your retirement strategy. Get in touch to explore your pension consolidation options.