Managing your dividends with ii

Dividend reinvestment

  • Opt in to automatically reinvest your dividends for £1
  • Choose popular shares, investment trusts and REITs
  • Minimum dividend value for reinvestment is £10

Managing your dividends with ii

Whether you're investing for your retirement in a SIPP, saving for a rainy day in an ISA, or looking to boost your capital in a trading account, automatically re-investing your dividends turns that income into capital. Studies over time have shown that re-investing income can really pay extra dividends when it comes to boosting your capital.

When investing in Unit Trusts and OEICs (funds), choosing the 'accumulation' units means the income generated in the fund is automatically rolled-up to buy more shares and increase the value of you units without you taking any action or incurring dealing costs. (Accumulation units for ETFs are often referred to as 'capitalising units' – you can see this on the ETF factsheet when you click the 'summary' tab.)

The recently introduced dividend allowance of £5,000 may mean you pay no tax on Income from investments in your trading account. Tax-efficient accounts such as ISAs and SIPPs can help maximise those gains as, under current rules, income doesn't count towards your dividend tax allowance and gains are not subject to Capital Gains Tax (CGT). But do bear in mind that this could change in the future and the value of benefits will depend on your personal circumstances. Check out our article on how the dividend tax allowance may affect you.

Whether you're investing for income or growth, your dividends can play an important part. Your ii account can help by giving you various options on how you use that investment income.

How do I reinvest my dividend?

The 'default' setting is for dividends to remain in your account as cash. So, if you've not previously made changes and you want to your dividends to be reinvested, all you need to do is:
  1. Login to your account
  2. Select 'dividend reinvestment' from the'portfolio' menu
  3. Tick the box to reinvest all eligible current and future dividends or tick the specific stocks you’d like
  4. Save the changes
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.

Things to consider

  • Optional automatic dividend reinvestment is available for popular shares (including the FTSE350) and a range of Investment Trusts and ETF’s that are paid onto your account in Sterling.
  • It costs £1.00 each time you reinvest with a minimum investment of £10.00.
  • If you elect for dividend reinvestment, this will take place usually within two business days following payment of the dividend to your account.
  • Once a reinvestment is complete, you will receive a contract note confirming the reinvestment has taken place.
Please note that share prices and dividend pay-outs in quoted companies fluctuate over time and pay-outs and share price rises are not guaranteed. We advocate 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.

Login to your account today and familiarise yourself with dividend reinvestment.