Investors see UK dividend growth trail overseas peers

UK dividends are lagging the rest of the globe after eking out the weakest performance in the G7 group of the world's most advanced companies, a report out today says.

Drugs giant GSK was among the firms paying out large special dividends. Picture: GSK/PA Wire

Dividend cuts from some of the UK’s biggest companies and, for overseas investors, the slump in sterling have both taken their toll, says the Henderson Global Dividend index.

UK payouts fell 3.3 per cent year-on-year in the second quarter, Henderson Global said, as major groups such as Standard Chartered and Barclays banks and supermarket giant Morrisons were among the firms to make “steep cuts”.

The UK’s total payout of £25.8bn was 7.7 per cent up on the same quarter last year, but the index said that was mainly due to “very large special dividends” issued by drugs giant GlaxoSmithKline and Intercontinental Hotels.

The report said: “Profit growth remains under pressure in the UK, limiting the potential for companies to increase dividends.”

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