UK dividends fell 4.6% in Q1 – masking encouraging growth in key sectors

Key highlights:

  • Total dividends: UK dividends fell to £14.0bn in Q1 2025, down 4.6% on a headline basis and 0.2% on an underlying basis 
  • Key cuts: Cuts from three prominent companies hit the Q1 growth rate by five percentage points, while lower special dividends also hit the headline total
  • Pharmaceuticals companies: Currently showing the fastest dividend growth in a decade, made the strongest positive contribution in Q1
  • Median growth: The typical (median) company dividend growth was 3.3% 
  • 2025 dividends: Better than expected in Q1, and Q2 looks more positive too, though renewed strength in the pound will now depress headline growth this year 
  • Underlying growth: Upgraded to 1.8% (from 1.0%) generating £85.6bn in regular dividends for 2025
  • Headline growth: Downgraded to 0% (from 0.7%) reflecting stronger pound – headline payouts set to reach £90.1bn
  • Share buybacks: Final tally for 2024 was £63.2bn as repurchases accelerated in the second half of the year

“As US trade policy convulses capital markets, investors are absorbing the likely impact on corporate profits. Despite this, Q1 was a little better than we expected, and Q2 is shaping up well too, with the fastest growth coming from banks.”

Mark Cleland

Mark Cleland
CEO of Governance Services and CEO of Issuer Services UCIA

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