Dividends are accumulated and applied respectively at the beginning of the following month.
There are two types of ETFs: Accumulating (Acc) and Distributing (Dist). Accumulating ETFs (like most of the ones seen in the managed growth range) re-invest dividends at a fund level. Meaning, that no dividend payment will be issued by the ETF but rather the proceeds will be re-invested into the ETF. Holders of the ETF will still benefit from these corporate actions via an appreciation of the value of the ETF.
Distributing ETFs pay out dividends. Your portfolio type determines how dividend payments are treated. If you are using an Income Portfolio, the dividends will be automatically sent to your nominated bank account at the start of the month. Growth Portfolios as well as all DIY Portfolios will receive dividends as cash payments. These payments will be treated in the same way as top-ups or any other new funds:
If you are using a Managed or DIY Growth portfolio with the AutoInvest setting ON, the dividend will be automatically invested in your portfolio.
If your DIY portfolio's AutoInvest setting is OFF, the dividend will stay as cash in the portfolio balance. You can withdraw it to your bank account or manually invest it in the portfolio or into a single ETF.
In an ISA portfolio, distributed dividends don't reduce your remaining ISA allowance.