What is T+1 settlement in the UK stock market?

T+1 settlement means that when you buy or sell a share listed on the London Stock Exchange, the trade must be fully settled — cash from the buyer delivered to the seller, and shares from the seller delivered to the buyer — within one business day of the trade being executed.

The UK moved to T+1 settlement in October 2024, aligning with the United States (which switched in May 2024) and shortening the previous T+2 cycle. Settlement is processed through Euroclear UK & Ireland (formerly the CREST system), which acts as the central securities depository.

The move to T+1 has several practical implications. It reduces the time during which either party is exposed to counterparty risk — the risk that the other side of a trade fails to deliver cash or shares before settlement is complete. It also means that ex-dividend dates are now one trading day before the record date rather than two, so investors buying shares on the ex-dividend date (or later) will not receive the upcoming dividend.

For retail investors using a stockbroker, the practical experience is largely unchanged: trades execute instantly through the broker's interface, and settlement happens automatically in the background. The T+1 rule matters more for institutional desks, fund managers, and market makers who manage large settlement queues and foreign exchange conversions to fund purchases.

Shares held in an Individual Savings Account (ISA) or Self-Invested Personal Pension (SIPP) settle in the same T+1 cycle. Investors who sell shares in these accounts and immediately reinvest the proceeds should confirm with their broker whether the cash is available before the settlement of the new purchase.