Dividends: What you need to know
The wide range of shares available means you can earn regular income through dividends. You can choose to reinvest the dividends – i.e. buy more shares – or keep the payments as income.
Here we discuss what you should consider when taking income through dividends and advise on the options available to investors for doing so.
It’s important to note that returns from dividends aren’t guaranteed and you could get back less than you initially invested. You might get no dividends and the share price can fall. If a payment is available, the company will detail this on their website.
The ex-dividend date
The London Stock Exchange sets what is known as an ex-dividend date (XD date). To qualify for a dividend payment, you must hold the shares when the market opens on the XD date announced by the company. If you purchase your shares on or after the XD date, you won't be entitled to payment. Additionally, if you sell the stock before the XD date, you will not be entitled to the dividend.
For example, if the XD date for a stock is on 3 March, then to be entitled for the dividend payment you must hold the stock as of midnight on 2 March.
The payment date
This is the date in which a dividend is scheduled to be paid.
If you’re eligible for a payment, you can expect to receive this up to six working days from the scheduled payment date. This is because when we receive a company payment, we receive it in bulk and therefore need a little time to ensure the company has sent the correct amount, and then allocate it to each shareholder.
Although this reconciliation can take up to six working days to complete, please be assured we'll always work as quickly as we can to make dividend payments, bearing in mind six working days is the longest we'll ever take.
Where can I find these dates on the website?
You can find both the XD and payment date when following the directions below:
- Login to your account
- Click Insight from tabs towards the top of the page
- Click Company Information
- Enter the name of the company you wish to view dates for in the Search box, then click Search
- Click on the company name
Within this page, there is a Company Information box. Simply click on the Dividends tab for both latest and past dates. If the company dividend date isn't available, it may not have been announced.
The dividend payment option is chosen at the account opening stage. However, you may change your option at any time by sending a secure online instruction. Alternatively, you can contact our Client Service Team on 0800 279 6551* or 0141 352 3909*. Instructions to change your dividend payment option must be given ten working days before an XD date in order to take effect.
There are four options available to investors. To help you decide which option is best for you, please find the individual tabs below.