UK shareholder payouts to top £100 billion

Collective UK dividends are set to push through £100 billion this year after coming in just shy of that total in 2018, according to a report out today.

Banking dividends did well, marked by the restoration of RBS's payout. Picture: John Devlin

Shareholder payouts rose 5.1 per cent to a headline record of £99.8bn last year, the latest UK dividend monitor from Link Asset Services reveals.

A combination of rising profits, slightly better-than-expected special dividends, and the slump in the pound in the second half of the year all contributed to the bumper haul.

The underlying total, which excludes special dividends, was 8.7 per cent higher at £95.9bn.

A higher payout from the enlarged British American Tobacco made the single largest contribution to growth, but the mining sector collectively accounted for most of the increase.

Banking dividends also did well, marked by the restoration of Royal Bank of Scotland’s payout after ten years. Nine out of ten sectors analysed increased payouts.

For 2019, Link forecasts more modest growth of 4.2 per cent in headline terms, bringing a total of £104.1bn – another new record.

Justin Cooper, chief executive of Link Market Services, said: “2018 was a terrific year for dividends but a terrible one for share prices. That’s pushed yields to extraordinary heights.

“We still expect 2019 to break new dividend records, but our forecasts are not especially bullish – one or two companies face difficulties and the easy wins from the mining sector are behind us.”