Dividends paid by UK-listed firms increased to £34.9 billion in the third quarter of the year, up by 89.2 per cent on the same period last year when payouts were hard hit by the pandemic, according to the latest UK Dividend Monitor report from Link Group.

Large one-off special dividends were partly responsible for the unexpectedly large increase, but even the underlying total jumped sharply, up by more than 52 per cent thanks to bumper payouts from miners and oil firms.

However, the large rebound in the latest quarter is still not enough to restore dividends to full strength, taking the headline total only a little higher than the level last seen in 2018. Most sectors have paid less year-to-date than they did in 2019.

Dividend payouts to investors have rebounded in the third quarter of 2021. Picture: Jon Savage.

The strong third-quarter figures have seen Link Group upgrade its forecast for payments across 2021. For the full year, it now expects headline dividends, including special dividends, of £93.2bn, a year-on-year increase of 44.8 per cent. Underlying dividends are set to rise 22.4 per cent to £77.4bn.

Link Group expects UK plc to yield 3.5 per cent over the next 12 months.

Ian Stokes, managing director for corporate markets in the UK and Europe at Link Group, said the boom in special dividends “reflects how some companies are making catch-up payments, some are capitalising on very strong demand, and others are seizing the moment to sell assets at a time of high prices and numerous cash-rich potential buyers”.

A message from the Editor:Thank you for reading this article. We’re more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers. If you haven’t already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription: www.scotsman.com/subscriptions

Bank divi restart boosts investor payouts during Q3

Comments