UK dividends dropped by 44% year-on-year in 2020 to £61.9bn, according to Link Group’s most recent Dividend Monitor*. The lowest annual total since 2011, it was nevertheless boosted by a better-than-expected Q4, which saw suspended payouts restored. The financial sector accounted for two-fifths of the cuts, the most significant contributor. Oil dividend cuts contributed another fifth. Less affected were dividends from FTSE 100 companies, with underlying dividends falling by 35%; mid-caps’ payouts fell by 56%.
Cause for hope?
Forecasts suggest that payouts could rise by 8.1% on an underlying basis, yielding £66bn in 2021; in a worst-case scenario, they could fall by 0.6% to £60.7bn. CEO Corporate Markets of Link Group, Susan Ring, commented: “There are reasons for optimism, but the resurgent pandemic has pushed back the reopening of the economy even further. We still believe the worst is past, but a new lockdown means our expectations for 2021 are significantly more subdued.”
*Link Group, 2021
It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency.
Information is based on our understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.
Tax treatment is based on individual circumstances and may be subject to change in the future.
Other Insights of interest
20th May, 2025
Positioning portfolios in a protectionist world
US Vice President JD Vance spelled it out in Munich – “there is a new…
Read full insight
20th May, 2025
Navigating uncertainty together
Over the past five years, we’ve experienced a global pandemic, geopolitical conflicts, political upheaval and…
Read full insight
14th May, 2025
Investment megatrends for 2025 and beyond
Investing megatrends are powerful, long-term shifts expected to reshape industries, economies and investment markets on…
Read full insight
14th May, 2025
IHT receipts continue their ascent
HM Revenue and Customs (HMRC) data shows IHT receipts topped £6.3bn in the eight months…
Read full insight