Sharedealing in a digital age

It's not surprising that, in the current low savings rate climate, many people are investing in shares rather than saving in more traditional ways - around 12% of all UK shares are owned by individuals.1 However, it's not without risks as shares can rise and fall in value quickly. You may not get back your full investment so investing in shares is not for the faint hearted!

Many people who have shares own paper share certificates, which might be surprising in today's digital world. It's estimated that around 15 million share certificates are still held by individual shareholders in the UK2 and roughly 500,000 share certificate transactions are carried out every year.3 A lot of these shares have come from old privatisations (like the British Gas ‘Tell Sid' campaign) and demutualisations, or company Sharesave schemes.

The problem with paper

Many people like the comfort of owning something physical, but holding paper share certificates can cause problems:

  • They can be lost or stolen. If this happens, you have to contact the Company Registrar (who keep records of shares and holders) for a replacement, which can be expensive and takes time.
  • It's hard to keep them up to date. Companies can merge or go into liquidation, or you might move house, making it easy to lose touch with your shareholdings if you forget to let the Company Registrar know you've moved.
  • If you inherit paper share certificates, it can be very difficult to work out which ones are still valid, or what the shares are worth.
  • Trading them can be difficult, and many brokers won't deal with paper shares anymore. Even if they do, their charges can be expensive and the process awkward.
  • The European Parliament has passed the Central Securities Depositories Regulation (CSDR), which means that, from 2023, companies won't issue new paper certificates. By 2025 customers will be expected to transfer them to electronic shareholdings (known as ‘dematerialisation').

What are my options?

If you hold paper share certificates, don't worry. There are a couple of alternatives, depending on what you'd like to do:

Cashing in your shares

  • If you want to cash in your shares, first you should check that your share certificate(s) are still valid. You can do this by contacting the Company Registrar (who can usually be found on the share certificate).
  • Once you have done this, you need to find a broker to trade your paper shares. Costs for paper share dealing can vary quite a lot, so it's worth shopping around.

Switch your shares – go paperless

If you want to keep your shares, you can transfer your paper certificates into electronic holdings. Most brokers don't charge you for this, and they'll even sort out the transfer for you. This is called a “Nominee service” - your shares are held in the broker's name but you still remain the owner (the ‘beneficial owner').

It's worth checking in case your broker charges an account or inactivity fee, especially if you're not planning on trading, and just want to hold your investments.

What's the advantage?

  • You won't have to worry about losing your share certificates (or the costs involved in replacing them)
  • Your shares will be kept up to date automatically
  • If your Nominee account comes with online access (and most brokers offer this service), you can easily view and trade your shares online.

Trading made simple

Did you know that we're the only building society to offer a share dealing service? Through our association with Jarvis Investment Management, we provide an execution-only service. So you'll have the freedom to make your own decisions, but won't receive any financial advice.

If you're interested in holding and trading your shares electronically, you could transfer your paper shares into a Trading account with us.

Please remember that stocks and shares and any income derived from them can rise and fall in value. You may not get back the full amount of your investment. If in doubt, please consult an independent financial adviser.
All customers enter into transactions at their own risk.

You'll be able to:

  • Buy and sell UK shares over the phone or online
  • Trade shares at live market prices
  • Benefit from competitive dealing rates
  • Deal with a UK-based customer service team
  • Pay for purchases by debit card and have sale proceeds paid straight to your bank account.

The standard dealing rate is £11.95 for all online UK trades up to the value of £100,000.

Become a frequent trader, by completing 50 trades, and you'll get an even better rate of £8.95 per trade.

Or if you just want to cash in your paper share certificates, rates start from £25.00.

Any deals over £100,000 will incur an additional dealing charge of 0.1% of the deal value over £100,000. The following additional dealing charges are also payable in relation to any share purchases. Stamp duty of 0.5% or Stamp Duty Reserve Tax (SDRT) payable on purchases of all UK shares (excluding shares on AIM – formerly the Alternative Investment Market and other recognised growth markets). Transactions over £10,000 are also subject to a £1 levy for the Panel of Takeovers and Mergers.

Find out more about our sharedealing service.

Yorkshire Building Society share dealing service is provided by Jarvis Investment management Ltd (Jarvis), and Jarvis is entirely responsible for the performance of the services. Jarvis Investment Management Ltd is authorised and regulated by the Financial Conduct Authority. Jarvis is a member of the London Stock Exchange and NEX Exchange, and an approved HM Revenue & Customs ISA manager.

1 From the Office for National Statistics
2 Money Online, October 2017
3 Daily Telegraph Online, February 2017