From sharing value to building wealth

By Nigel Watson

10 Nov 2026 6 min read

The government is looking again at what happens to pension wealth once it has accumulated.

On 3 November 2026, the Department for Work and Pensions published proposals for Guided Retirement and Retirement Collective Pension Schemes, including arrangements that could pool investment and longevity risks to provide income in retirement.

The proposals concern pensions, but the institutional idea is potentially wider. If shared providers and standardised arrangements can help people turn pension savings into retirement income, could a similar principle help more employees turn a share of the value created by their businesses into personal capital?

That involves two distinct jobs: distributing more corporate value to employees, and helping employees turn some of what they receive into lasting personal wealth. We already have mechanisms capable of doing both. What we may lack is a simple way of connecting them.

The proposition worth testing is whether connecting those mechanisms more effectively could change behaviour on both sides: encouraging more employers to share value and helping more employees build portable personal capital from it.

Automatic enrolment offers part of the analogy. Legislation and employer obligations were essential, but common providers, professional administration and default arrangements also helped make pension saving part of ordinary working life. The interesting lesson is that institutions can influence not only how money is managed, but how widely a benefit reaches people.

The first decision: who gets to share?

Businesses already have numerous ways of sharing value with employees. Options, growth shares and LTIPs can provide meaningful exposure to corporate success, while SIP and SAYE provide established broad-based routes.

But participation is uneven. Many employees receive little meaningful equity. Private businesses can face valuation, governance and liquidity difficulties when distributing shares widely. SIP and SAYE provide established broad-based routes, but HM Treasury’s November 2025 summary of responses⁠ recorded concerns about scheme complexity, SIP trust costs and the availability of SAYE savings providers.

Broader participation does not, however, have to mean distributing shares. Consider a profitable private business with 300 employees. Its owners decide to allocate 3% of annual profits above a £10 million hurdle to the workforce. On profits of £20 million, measured before that contribution and its associated employment costs, the pool would be £300,000: £1,000 per employee on an equal allocation, before tax.

There is nothing new about profit-sharing. In Who gets the AI surplus?⁠, I considered how AI-driven productivity could change the distribution of corporate value.

That therefore is the first decision: does the business share some of its surplus with employees at all?

But once it does, a second, potentially more interesting decision follows.

The second decision: what happens to the money?

Suppose the £1,000 payment arrives with a simple choice: take the cash, direct some into accessible savings or invest the net amount through an established provider.

The resulting assets would belong to the employee, not the employer and could be retained after changing jobs. A shared service could connect profit-sharing, payroll, employee communications, savings and investment without every employer building its own arrangement.

Repeated over time, that raises a more interesting question: could ordinary profit-sharing become one route through which employees accumulate portable personal capital?

There are two separate claims to test. The first is whether simpler, more standardised arrangements, would cause employers to share value that they would not otherwise have shared. The second is whether presenting employees with a savings or investment choice when they receive that value would lead them to retain more of it.

Simply moving existing payments or existing savings through a new platform would not, by itself, achieve either objective.

Making saving available is not the same as making it happen

Research by Nest Insight⁠ illustrates the behavioural challenge. In one workplace savings trial with new starters, participation was around 1% under an opt-in arrangement and 48% under an opt-out approach. Those results concerned accessible cash savings, not investment of profit-sharing awards and cannot simply be transplanted into a different product.

They nevertheless suggest that presentation and timing matter. The moment someone receives a reward linked to the performance of their business might be a particularly useful time to make a deliberate savings choice.

Nor is investing always the right decision. Someone with expensive debt or no emergency reserve may be better off taking cash or using accessible savings. The objective is not a higher balance on an investment platform. It is greater financial resilience and, where appropriate, lasting capital.

Collective ownership and personal capital

The UK already has an institution for collective employee ownership: the employee ownership trust (EOT). An EOT can keep control of a company in trust for its workforce without allocating individual shares, while qualifying EOT-controlled businesses can pay employee bonuses of up to £3,600 a year free of income tax, although NIC remains payable.

But an EOT does not give each employee a transferable interest in the underlying shares to take to their next job. An EOT preserves collective employee ownership of the business. The arrangement considered here is concerned with helping individual employees accumulate portable personal capital from the rewards they receive.

The two can complement each other. Employees of an EOT-owned company might choose to save or invest some of their cash bonuses just as employees receiving conventional profit-sharing might. One institution keeps the business in employee ownership; another helps employees retain some of its economic benefit personally.

We may not need another institution

France offers a useful comparison. Its plan d’épargne interentreprises allows employee savings arrangements to operate across unrelated employers, connecting profit-sharing and employer contributions with professionally managed funds. Employees can retain savings after leaving, subject to the applicable access and transfer rules.

There are building blocks in the UK too. In August 2025, the FCA explained⁠ how payroll-linked workplace savings can operate through employers, payroll providers and savings institutions. Its statement principally addressed accessible cash accounts, rather than investment arrangements, which carry different risks and regulatory considerations. But it demonstrates that shared delivery infrastructure need not begin with a new trust or fund.

That, in turn, has changed my thinking about EBTs. In EBTs: A Tool in Need of Reinvention⁠, I explored whether employee shares could be pooled across employers. Having looked further at master EBT structures, I am less convinced that trust architecture alone is the answer.

A simpler division of labour may be better. Share plans, EBTs, EOT bonuses and profit-sharing arrangements can determine how corporate value is allocated. Established savings and investment providers can manage what employees have earned. We may not need a new institution to perform both functions.

Two questions worth testing

The commercial case needs evidence on both sides.

For employers, would standard documentation, payroll integration, employee communications and provider onboarding materially reduce the cost and complexity of offering profit-sharing? More importantly, would that cause businesses to share value that they otherwise would not have shared?

For employees, would being offered a timely choice when receiving a profit-sharing payment lead to greater net saving than simply receiving the cash through payroll?

A trial could compare cash alone, cash accompanied by a savings choice and a more integrated provider arrangement. It would need to consider subsequent withdrawals and displacement of other saving, not simply money remaining on the platform.

We already know how to award shares, share profits and invest money. EOTs provide a mechanism for collective ownership; existing providers provide infrastructure for individual saving and investment. The question is whether connecting those systems more simply could encourage more employers to share corporate value and help more employees retain some of what they receive.

There is a wider policy context too. The Government wants more capital invested productively and has been looking at ways to mobilise both pension and household wealth in support of investment and growth. Profit-sharing approaches the question from the other end: not simply how people invest more of their existing wealth, but whether more of the value created by businesses can reach employees in a form from which personal capital can grow.

Sharing the surplus is only half the job. Helping more employees turn their share into lasting wealth should be the next challenge.

At Burges Salmon, our incentives, employment tax, employee ownership and pensions teams advise businesses on how to share corporate value with employees, from conventional share plans and EOTs to wider reward and ownership structures. We are particularly interested in how these arrangements might evolve to make participation more accessible, commercially practical and capable of creating lasting employee wealth.