The difference boils down to how income is paid from the fund.
Income: Sometimes called distribution funds, these funds pay any interest or dividends to your Dodl cash balance. The Cash market fund is an ‘income’ class fund.
Accumulation: These funds pay the income back into the fund, increasing the amount of the fund you own.
❗ If you hold the fund in a pension, ISA or Lifetime ISA, this income won’t be taxed. But if you hold the fund in a general investment account, it will be taxable. It’s important to know that this includes income from accumulation funds – even though you’re not paid it directly.
If you have a general investment account, dividends for both income and accumulation funds will be included on your annual tax statement.