The value of UK dividends is expected to increase in 2026 after another disappointing year in which payouts failed to reach pre-Covid levels.
According to a report from transfer agent Computershare, headline dividends will increase by 1.5% to £88 billion. Regular dividends will increase by 2% to £85.9 billion
The forecast comes on the back of a positive end to 2025 with regular and headline dividends rising to £13.9 billion and £14.3 billion respectively
The report ascribes the positive final quarter to a number of factors including the number of companies promoted from the Alternative Investment Market and a late surge on special or one-off dividends, notably supermarket Sainsbury’s and financial services provider Admiral.
In addition, the energy, consumer basics and property sectors all experienced better-than-expected payouts.
However, the increase in share buybacks by listed UK companies, which have more than doubled in the last six years – from £30.8 billion in 2019 to £63.6 billion, has limited the surplus cash available to shareholders.
“Dividend payouts have still not regained pre-pandemic highs and the slow dividend growth we’ve seen since 2020 largely continued last year,” said Mark Cleland, CEO, issuer services, UCIA.
“Rates did improve as 2025 progressed – and might well have been higher although many companies used significant sums of capital to undertake share buyback programmes,” said Cleland.
“There are no clear indications that dividends will grow much faster in 2026, but a median dividend growth of 3.7% suggests a healthier market trend than the outlying figures suggest,” said Cleland.
