Dividends
- What is a dividend?
- I've lost a dividend cheque. Can I have a new one?
- What does "ex-dividend" mean?
- What is a tax credit on a dividend?
- How do I obtain historical share prices?
- When are dividends usually paid?
- Can my dividend be reinvested and used to purchase more shares?
- Can I have dividends paid direct to my bank/building society account?
- My dividend cheque is out-of-date. What do I do?
- I have not received my dividend cheque. Whom do I contact?
- I live abroad - can I receive dividends in my local currency?
Answers
Q: What is a dividend?
A: A company that is making a profit often keeps a portion of its earnings to reinvest in the future of its business. The remaining profits will normally be given back to the owners of the company, its shareholders, as a dividend payment.
The dividend is often paid in two or more instalments over the year. The initial payments are called 'interim dividends' and the remainder, paid as a 'final' dividend, is approved by the shareholders at the Annual General Meeting.
Q: I've lost a dividend cheque. Can I have a new one?
A: Yes. If you confirm the details to the Registrar, they will send you a replacement. They may charge a fee for this service. Please visit: www.shareview.co.uk/clients/paymentreissue/ to view the standard fees.
Q: What does "ex-dividend" mean?
A: This is a description, sometimes abbreviated to 'xd' that is often quoted next to a share price. It translates as 'without dividend' and means that the next dividend payment is not included in the price of the share. This is necessary because the dividend is paid to all shareholders who were on the register at close of trading on a specified day. Any shareholder buying shares who is registered after this day will not receive the dividend. To compensate for this, the market price usually drops by the amount of the dividend payment and the description 'xd' is added to share price quotations to confirm that this has happened. To avoid confusion around this time, prices are sometimes quoted 'cum dividend' (meaning 'with dividend') which means that the buyer will be entitled to the next dividend payment and the share price has not been adjusted. In respect of the 2011 interim dividend, Pearson plc's shares went ex-dividend on 17th August 2011.
Q: What is a tax credit on a dividend?
A: A dividend is normally paid net of a portion of tax, referred to as a 'tax credit', which is then used by the company to pay the Corporation Tax that is charged on its profits. The portion of tax credit is currently fixed at one tenth of the gross dividend. The Registrar will send you a tax voucher on behalf of the company which shows the amount of tax credit paid on each dividend. You should keep this document as the Inland Revenue may ask you for the information. If you are a lower rate taxpayer, you cannot normally reclaim the tax credit but if you pay tax at the higher rate, you may have to pay a further liability. For more information on your personal tax position, you should consult a financial advisor or contact your Tax Office.
The Registrar can issue a replacement tax voucher if you need one. There is no charge for a replacement requested within one month of payment. After that there is a charge of £15.00 including VAT for the first replacement and a charge of £3.00 for additional replacements.
Q: How do I obtain historical share prices?
A: Historical share prices can be found in the share price section of this website, where we hold data going back ten years. View historical share prices. If you require share prices prior to this, you should contact your own broker. Alternatively, the London Stock Exchange can provide this information.
Q: When are dividends usually paid?
A: Dividends are normally paid twice a year in May and September.
Q: Can my dividend be reinvested and used to purchase more shares?
A: Yes, you can elect to receive future dividends as shares rather than cash under Pearson's Dividend ReInvestment Plan (DRIP). You can participate by completing a DRIP mandate form (available here) or contact the Registrar directly.
The DRIP allows shareholders to reinvest their cash dividends in shares bought on the London Stock Exchange. On each dividend payment date, the company buys shares in the market on your behalf using your cash dividend, having first deducted a percentage to cover stamp duty and administration fees. A share certificate will be sent to you about 10 working days after the dividend payment date. To be eligible for the next dividend, the Registrar must have received your completed form at least 15 days before payment date. An explanation of how the plan operates and the charges, together with a mandate form is available from our Registrar.
Q: Can I have dividends paid direct to my bank/building society account?
A: Yes, you can ask to have your dividends paid direct into a bank or building society account, which will:
- avoid the risk of cheques being lost in the post or mislaid
- save you a trip to the bank to pay in the cheque
- be credited to your account on payment date
- avoid you having to wait for a cheque to clear on your account
A tax voucher will be sent to your registered address so you know when and how much has been paid into your account.
If you would like your dividends to be paid in this way, please complete a Bank mandate form.
- By telephone (provided you own 2,500 shares or less). You will need your Unique Reference Number and a UK registered address. Or
- By post – just complete the Dividend Mandate Form
The above instructions need to be received by Equiniti before the record date for a dividend.
Shareholders wishing to find further information about dividend payment details should visit the Shareview website at http://www.shareview.co.uk.
The Registrars address is here.
IMPORTANT: Please take care when completing the sort code and account number as we cannot accept liability if you give incorrect information and your dividend is paid into the wrong account. If a building society account is to be credited, please ask them to stamp the completed form to confirm that the quoted account details are correct.
Q: My dividend cheque is out-of-date. What do I do?
A: You should return your cheque to the Registrar to be reissued. Please note that Pearson dividend cheques are valid for six months from the date of issue.
Q: I have not received my dividend cheque. Whom do I contact?
A: If you have not received the dividend payment please contact the Registrar.
Q: I live abroad - can I receive dividends in my local currency?
A: Yes, the Registrar’s Overseas Payment Service enables you to receive your dividend directly into your bank account in your local currency by arrangement with Citibank Europe PLC. Please note that Equiniti will deduct a payment charge from each dividend payment before converting it into your chosen currency. Your tax voucher will be despatched in the normal manner.
This is a service that can be arranged in over 30 countries worldwide and it normally costs less than paying in a UK cheque. The dividend will be credited to your account automatically - normally just a few days after the company’s dividend payment date.
For further information on this service or to sign up for this service, please visit http://www.shareview.co.uk, download the appropriate application form and terms and conditions and then complete and return it to the relevant address, as detailed on the form. Alternatively you can contact Equiniti on +44 (0) 121 415 7047 to request an application form and terms and conditions. Please have details of your shareholding and Shareholder Reference with you.