S
Sombrero
i get shares with my work, and they're offering dividends as cash or extra shares... never really thought about it before, but is either option better than the other?
I joined a "sharesave " scheme, with a company I worked for from 1979-1990. It was taken over in 1990 and even though my sharesave had about 6 months to run till I got the shares, or capital + interest, the takeover company offered me well above the going rate to drop out of the scheme. I had about £3000 saved at that point and was offered £6000 (going share price at the time would have made me about a grand on top of my savings).
i get shares with my work, and they're offering dividends as cash or extra shares... never really thought about it before, but is either option better than the other?
have the divs reinvested into additional shares. Chances are they will be so small (a matter of pence at first, or maybe a pound or two) that you won't notice it if you get cash, but, reinvested, they will make your pot grow faster, and you will usually have no, or a very small, dealing charge that way.
If your pot grows so big that you are receiving £100 or more in divs, it becomes big enough for you to consider taking the cash and using it for a Christmas present, or to take your wife or girlfriend out, or maybe both of them.
Typical UK divs are in the region of 4%, so you would need £2,500 worth of shares to get that, which I am guessing will take you some time to accumulate.
Dividends have 10% tax deducted. If you are a standard-rate taxpayer you have no additional tax to pay on divs. If you are a non-taxpayer you can't get a refund.
No, I felt it was immoral to participate in the Thatcherist casino, so I did not involve myself in any of the privatisations.