Santander Share Scheme DRIP rip-off

PeterGor

Equinity have just written to say that they have changed the commission rate on DRIP (Dividend Reinvestment Plan) transactions from 0.5% to 1%, but now with a minimum charge of £1.50.  This means that a small shareholder (there must still be thousands of us who invested in Abbey National years ago) who is getting quarterly dividends in the order of £30 will pay £1.50 (5%) instead of around 15 pence per dividend.  How can they justify a 900% increase in changes?

I'm getting out.  Any others in a similar position should consider doing the same.

Apodemus

By my maths, if you are getting £30 a quarter on a share that is trading at a yield of 3.93% and a price of £2.10 per share, then you must have about 1500 shares, worth about £3,000.  So, well done!  My BNC holding from their take-over of Alliance & Leicester is only 100 shares!  

DRIP schemes are rarely good value (and greatly complicate record keeping for tax purposes!) so I'm not a fan of them.  But on the other hand I don't think you could buy £30 worth of shares anywhere, for less than £1.50 commission, so perhaps the new charges are reasonable?

When you say you are "getting out" do you mean you are selling the shares or getting out of the DRIP?  The charges from Equiniti probably aren't Santander's fault and using the DRIP is your choice. Plenty of good arguments available on whether to buy or sell BNC stock, but I wouldn't see the DRIP charges as one of them! 

PeterGor

It shows how much I’m tracking my holding; I hadn’t realised BNC had switched from quarterly to half-yearly dividends in 2020.  I only have 850 or so shares.  I’m just leaving the DRIP; I’ll just stick with investing via an ISA in larger tranches, so that broker charges take a smaller proportion of the investment.  

Previously 0.5% broker cost meant that the DRIP was reasonably good value.  A 5% charge isn’t.  If Santander gain nothing from the hike in fees, that makes Equiniti’s greed even less acceptable.

phi1

Thinking of getting out of DRIP because it seems to incur vast Spanish witholding tax which cash doesn't seem to. Or have I got that wrong?

chaotic_j

My partner has left the Santander DRIP scheme as last time a dividend was issued Equniti's commission was only 2p and next time it'll be £1.50 which is an increase of 7400% - a rip off indeed!