UK Dividend Monitor

UK dividend fell 1.4% in Q2 – as lower one-offs and stronger pound hit headline total

Key highlights:

• Total dividends: UK dividends fell 1.4% to £35.1bn: one-off special dividends halved, and a stronger pound also hit the headline total
• Exchange rate: The strong pound against the dollar erased £934m from Q2 headline payouts
• Underlying growth: Regular dividends which strip out one-offs rose 6.8% to £33.1bn on a constant-currency basis
• Median growth: The typical (median) company dividend growth was more modest at 4.1%, with 22% of companies reducing payouts
• Top sectors: Defence contractors and financials accounted for three quarters of Q2’s growth
• Headline forecast: Headline 2025 forecast trimmed by £1.8bn – mainly owing to lower projected one-offs and continuing sterling strength – down 1.4% year-on-year to £88.3bn
• Underlying forecast: Good first half means annual underlying growth upgraded to 2.8% (from 2.1%) on a constant-currency basis, bringing regular dividends of £85.1bn