Private investors set to reap record dividends in 2012

Private investors are expected to pocket a record £8.6 billion of dividends this year, a £510 million increase on last year, a report out today predicts.

In total over the last five years, private investors have earned dividend income of £37.9bn out of a flat stock market, equivalent to almost one-fifth of their holdings, the report by Capita Registers showed.

The firm forecasts dividends will grow 10 per cent in 2012 to a total £75bn, of which £8.6bn will be paid to private investors.

Overall, investors reaped £8bn in dividends in 2011, but this was still shy of the £8.41bn high they earned on their investments in 2008.

The most popular area was the resources sector – soaring oil prices and good news on dividends drove investors to add £368m to their holdings of resources shares. They also bought £144m of financial shares, but consumer goods, healthcare and utilities all saw net selling.

Capita said that investment trends suggested investors were relatively bullish about the outlook.