Many employees are receiving thousands of pounds this year from maturing sharesave schemes taken out three or five years ago that allow them to buy shares in their companies at discount prices.

After three years of rising share prices, most of these schemes are showing significant profits despite the recent wobble in the stock market. But few employees are receiving financial advice about what to do with their shares to reduce risk or gain further tax breaks.

At present 1,165 companies offer sharesave schemes and 2.2 million employees are contributing to them. Last month Argos staff received gains of up to £28,000 after the maturity of their first sharesave scheme run by GUS, while this year Marks & Spencer announced that its store staff had shared a total of £40 million in gains made through its scheme. The average gain per employee was £3,500.

Sharesave schemes, also known as save-as-you-earn share option schemes, allow employees to save between £5 and £250 a month for three or five years to buy company shares at a price that is fixed just before the plan starts, normally at a discount of up to 20 per cent off the market value at the time.

During the savings period, the money is put into a bank or building society. At maturity — after three, five or seven years (for the seven-year plans, five years of savings are left in the account for a further two years) — a tax-free bonus is added. These bonuses are currently equivalent to an interest rate of 2.49 per cent to 2.91 per cent. Investors can then choose whether to buy the shares.

Paul Stoddart, of Halifax Employee Share Services, one of the leading providers of the savings plans for sharesave schemes, says: “If the current share price is more than the option price, most people will exercise their option to buy the shares cheaply.”

Jane Tuckwell, employee share ownership manager of IFSproshare, the organisation that promotes share ownership generally, points out that even if a company’s share price does not move, employees will make a profit if they have received their share options at a 20 per cent discount.

“If the share price drops to less than the option price, as many did in 2003, there is no risk,” Ms Tuckwell adds. “Employees can get their cash back. All they will have lost is a bit of extra interest that they might have earned in a bank or building society account.”

But what should employees do once they have bought their shares through a sharesave scheme? Holding on to them is the riskiest option, according to advisers such as Richard Wadsworth, director of Fitzallan, the independent financial adviser (IFA). He says: “Holding shares in just one company is risky enough, but if it is the company that employs you, there is a lot more risk involved because you are relying on that company for both your income and your investments — and your pension, too, if you are in a final-salary scheme.”

Marconi and Railtrack in the UK, and Worldcom and Enron in the US, are recent examples where employees have seen their share savings decimated when these companies ran into problems.

Most advisers believe that it is better for employees to sell their shares. The administrators of the scheme will usually arrange this for a modest fee. But before doing so, employees need to consider their capital gains tax (CGT) position. Donna Bradshaw, financial planning strategist at IFG Group, another IFA, says: “A potential CGT bill will arise on the difference between the amount paid for the shares and the proceeds of selling them. This may be covered by the employee’s annual CGT exemption, currently £8,800. If not, it may be better to spread the sale over more than one tax year.”

Another option is to transfer some of the shares to a spouse or partner to utilise his or her CGT exemption.

What is the best thing to do with the proceeds of the shares sold? “The first priority is to pay off expensive non-mortgage debts as you cannot guarantee that the return from any investment will exceed the interest you are paying on those loans,” says Nick Arbin, a senior consultant at the Pensions Partnership.