Dividend reinvestment

What is dividend reinvestment?

A dividend is a cash amount that some companies pay to shareholders. It is essentially a share of company profits.

If you don’t need the money, using your dividend payments to buy more shares can make a big difference to your returns over time.

We offer a dividend reinvestment service to do this for you automatically at a reduced cost of just 99p per trade.

What dividends can I reinvest?

You can set up automatic dividend reinvestment for a wide range of popular UK shares (including the FTSE 350), investment trusts and ETFs.

The minimum amount per dividend reinvestment is £10.

You can only automatically reinvest dividends that are received in pounds sterling.

Will I still pay tax on reinvested dividends?

There is no tax to pay on dividends in a tax-efficient account, such as a Stocks and Shares ISA or a SIPP.

Dividends in a general Trading Account are subject to tax. However, you can receive up to £500 in dividends (2024/25 tax year) before you will have to pay dividend tax.

Other things to consider

• Dividend reinvestment usually takes up to two business days after the dividend has been paid into your account.
• Once a reinvestment is complete, you will receive a contract note in your account.
• Share prices and dividend pay-outs fluctuate over time, and pay-outs and share price rises are not guaranteed. We recommend thinking about this strategy over the long term and we would also encourage investing in a portfolio of shares.
• The value of your investments and the income derived from them may go down as well as up. You may not get back all the money that you invest.

Please note that automated dividend reinvestment is only available for Trading accounts, ISA, Junior ISA and SIPP accounts and you'll need to change the default preference of each account separately.