Will the Lloyds shares sell off create a nation of small investors?

After the recent Lloyds Banking Group announcement, can we be considered a nation of small investors or SIDS?

Investing

MoneyPlus Features Team

13th November 2015 at 3:00pm

The announcement that Lloyds Banking Group is selling off around £2bn in shares in 2016 should be good news for many – particularly smaller investors – and looks likely to be hugely popular.

More than 60,000 people registered their interest in buying the shares in just one day on a Government website in October.

Shares worth holding on to?

The Lloyds shares will be sold at a discount of 5% on the market price, with smaller shareholders the priority. To make the sale as attractive as possible and, as a reward for those who keep the shares for the longer-term, individual investors will be given a free ‘bonus’ share for every ten they buy if they keep them for a year. The value of this bonus will be capped at £200.

So if you buy shares worth £1,000 you could well get £200 back in just a year.

It’s the biggest share sell off for years and could signal something of a return to the days when owning shares became a national obsession in the UK.

What are Sids?

In the mid-1980s, a Government campaign aimed to create a nation of small investors – ‘Sids’ – who bought shares in companies such as British Gas.

Share ownership became something that people were interested in and talked about. As the Government sold off shares, often at a discount, in companies to move their ownership into the private sector, more people than ever before saw the opportunity to invest.

Opportunity to buy

Whether the Lloyds share sell off catches the public attention in quite the same way remains to be seen. But it could be an opportunity for some people to consider buying shares, many for the first time.

If this applies to you, a new tax-free Dividend Allowance of £5,000 a year being introduced by the Government in April 2016 means you won’t have to pay tax on the first £5,000 of any share dividend income.

It’s good news for many smaller investors looking for income from the shares they hold.

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Past performance is not a reliable indicator of future performance. The value of your investments can go up or down and may be worth less than you paid in.