Sharesave 2016What will you do with your savings?Congratulations! You’ve saved for three years into Sharesave 2016 and your scheme is about to complete on 1 January 2020. This means you can now decide what you want to do with your savings. You can either buy shares or have your savings returned.As a reminder, the discounted share price for Sharesave 2016 is £2.50. This is higher than the current M&S share price.If this is still the case in January, buying the shares at £2.50 would not make financial sense as you could use your savings to buy shares at a lower price on the open market. If you would like to become an M&S shareholder, we are offering you the choice to buy shares at the market price on 20 January.

Remember, no matter what you decide now, you’ll still have the choice to buy shares at the discounted share price within six months of your scheme completion.

Discounted Share Price £2.50

Your choices

Savings Returned – Choice 1

You can choose to have your savings returned to you by cheque at any point up to 1 July 2020.If you have your savings returned now and M&S share price increases to above £2.50 at any point before 1 July 2020, you can still buy shares at the discounted price. Simply return your savings to Equiniti Limited (‘Equiniti’), our share scheme administrators, and purchase shares at the discounted share price.

Important Information A European regulation has been introduced known as the Market in Financial Instruments Directive II, or MiFID II for short, requires companies such as Equiniti to provide additional information to the Financial Conduct Authority (FCA) about share transactions. The aim of this regulation is to increase customer protection and prevent market abuse. Because of this regulation we may need to collect additional information from you when processing your transaction. Please take a moment to read ‘Your Questions Answered’ for more details.

Buy Shares – Choice 2

Use your savings to buy M&S shares at the market price on Monday 20 January 2020.This option is only available until 6pm on Friday 10 January 2020. Remember, if you decide to buy shares now you’ll STILL be able to buy more shares at the discounted share price, if the M&S share price increases to above £2.50, at any point until 1 July 2020.

Key Dates

1 July 2020 last date to buy

shares at the discounted share price

01January 2020

10January 2020

20January 2020

Sharesave 2016 completion date*

Deadline to buy shares at the market price

on 20 January*Your scheme completion date

and last date to buy shares at the discounted share price may be delayed if you missed payments into your scheme.

Shares purchased at market price

End of six-month period to buy

discounted shares

01July 2020

Last date to buy shares at the discounted share

price of £2.50

Make your decisionWhy might this be for me?Buy Shares• You want to become an M&S shareholder• You consider M&S shares to be a good investment and

you believe the share price will increase in the future• You’d like to receive any dividends M&S pays in the future• You can buy more shares than you could have at £2.50

for the same amount of savings• You don’t currently need all of your savings as cash

Savings Returned• You want cash immediately• You believe you’ll get a better return by investing

the cash elsewhere

What will happen next?Buy Shares• Your shares will be purchased on Monday 20 January 2020

by Equiniti Financial Services Limited• The cost of buying the shares will be deducted from

the amount you wish to use to buy the shares• The shares will be transferred into your M&S Share

Service Account

• If the share price on Monday 20 January 2020 is higher than £2.50, please refer to the Q&A.

Savings Returned• Your savings will returned to you by cheque

Other things to remember• If the M&S share price rises above £2.50 before your

Sharesave expiry date (normally 1 July 2020) you can return all of your savings and buy shares at £2.50 even if you purchased shares at the market price on 20 January using your savings (you will not be charged to purchase shares at the discounted share price).

What about taxes?Buy Shares• Your savings are tax-free• No income tax payable when you buy shares• Capital Gains Tax may be payable when you sell

your shares

Savings Returned• Your savings are tax-free• If you invest the money elsewhere any interest

may be subject to income tax

Your questions answered…Why am I not being given the choice to buy shares at £2.50 now?• The discounted share price for this Sharesave scheme was set at

£2.50. As this is higher than the current M&S share price you could buy shares at a lower cost on the open market.

• We are offering you the opportunity to buy M&S shares at a price lower than £2.50.

What are the costs of buying shares (choice 2)?• Dealing charges of 1% of the value of the shares purchased.

• Minimum dealing charge of £15.

• Additional stamp duty charge of 0.5% for each purchase.

The charges, including stamp duty, will automatically be deducted by Equiniti Financial Services Limited when the shares are purchased so you will not need to add this to your savings to buy shares.

Please be aware that share prices can go down as well as up and past performance is no indication of future performance.

What happens if I choose to buy shares now and the M&S share price rises above £2.50 on the Share Purchase date?• If on Monday 20 January 2020 the M&S share price is above the

discounted share price of £2.50, the Share Purchase facility will not be actioned and all your savings will be used to buy shares at the discounted share price of £2.50 instead.

• The final date to submit your request to buy shares request is 6pm on Friday 10 January 2020.

What happens if the share price rises above £2.50?• If the share price rises above £2.50 at any time before your Sharesave

expiry date, you can return all of your savings and buy shares at the discounted price of £2.50. This is also the case even if you have already bought shares through the Buy Shares choice.

• To do this you should write to Equiniti, saying you want to buy your shares for the 2016 3 year scheme and include a cheque made payable to Lloyds Bank plc re Marks and Spencer SAYE. Send both to Equiniti, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA United Kingdom. Please write your Equiniti Account Number on your letter and the reverse of the cheque.

What happens to my shares if I buy them using Choice 2 ‘Buy Shares’?• If you buy and keep your shares, M&S will transfer them into an online

share account for you. This is called the M&S Share Service.

This means that:

• No share certificate to keep safe.

• You can sell your shares over the telephone or online without a certificate.

• There are no charges for holding your shares in the M&S Share Service and no annual fee.

• You’ll receive a quarterly statement of the number of shares you hold in the Share Service.

• You can manage your shares online through www.my-choices.co.uk

Your questions answered…If I buy shares now, how do I sell them in the future?You can sell your shares at any time at competitive rates. The details of these rates and how you go about selling your shares will be sent to you after the Share Purchase.

What happens if I’ve missed any monthly payments during the three-year savings period?The share schemes website shows your savings end date. If this date is after 1 January 2020, you will not be able to opt for Choice 2 because you will not have completed your Sharesave scheme by the time the Buy Shares option is available. For every payment you’ve missed, your Sharesave expiry date is extended by one month. You will continue to have deductions taken from your monthly pay until you have completed your total payments (36 monthly payments). Once you have completed your total payments you’ll be able to have your savings returned to you or if the share price at that time is above the discounted share price you will be able to buy the shares at £2.50.

What taxes will I pay on buying and selling the shares?You will not have to pay Income Tax or National Insurance on your savings, or on any M&S shares that you buy using the buy shares choice. However, if you sell some or all of these M&S shares, you may have to pay Capital Gains Tax (CGT). This will apply if the gain, when added to any other capital gains you make in the same tax year, exceeds your annual allowance. For the tax year 2019/20, the CGT annual allowance is £12,000. If your gain exceeds your annual allowance, you will have to pay the CGT on the gain.

How can I reduce any Capital Gains Tax I may have to pay?• You may be able to reduce the amount of CGT you have to pay by one

or any combination of the following actions:

– Selling some of your M&S shares in this tax year and the rest in the following tax year (the new tax year starts 6 April 2020). This means you will have the benefit of two years’ CGT annual allowance.

– Giving some of your M&S shares to your husband, wife or civil partner. They can sell the shares and use their CGT annual allowance. Forms to make this transfer can be found on the People Guide under Pay & Benefits / Shares / Sharesave (this can be accessed by your Line Manager if you work in stores).

Where can I go to get financial advice on either choice or my tax position?M&S have partnered with WEALTH at work – a specialist provider of financial education in the workplace. This partnership aims to support M&S colleagues who want to take control of their money by providing information and tools on a range of financial topics. Simply logon to www.my-choices.co.uk and search wealth at work for more details.

Further details on CGT can be found on the HM Revenue & Customs (HMRC) website at www.hmrc.gov.uk or by calling HMRC on 0845 9000 444.

For more information can call the Sharesave Helpline on 0371 384 2941**or email mandsshares@equiniti.com.

** Lines open 8.30am to 5.30pm, Monday to Friday (excluding public holidays in England and Wales).