UK dividends fell by just under 50% in the third quarter this year, dropping to the lowest Q3 total since 2010.
Although the decline was less severe than in Q2, overall payouts decreased to £18 billion (€19.7 billion) over the three months to the end of September.
Two thirds of companies cut or cancelled their dividends altogether in the third quarter, compared to three quarters in Q2, according to the latest dividend monitor report from financial services firm Link Group.
The report highlighted that by normal standards a fall of this magnitude would be terrible for investors, but it is “significantly better” than the 57.2% drop in the second quarter caused by coronavirus uncertainty.
Positive signs of recovery are beginning to show, with some companies restarting payouts throughout the quarter, the firm said.
Susan Ring, CEO corporate markets of Link Group, said: “UK plc is not out of the woods, but the trees are perhaps thinning a bit. Our worst-case scenario has steadily improved all year and though UK investors face a historic decline in their income this year, the worst is now behind us.”
“As companies become better able to assess the impact of the pandemic and the associated restrictions on their operations, some are restarting dividends and a handful are even making up some of the lost ground,” she added.
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