UK dividends rise 14% year on year, led by banks and miners
Key Facts
UK dividend payments rose 14% year on year, according to a Financial Times report published in October, with banks and mining companies leading payouts to investors. The newspaper said "banks and miners lead payouts to investors," putting the two sectors at the forefront of the increase in funds distributed to shareholders. The increase follows record quarterly dividends from UK companies in the second quarter of 2026, according to Computershare. Companies paid a total of £35.3 billion during that quarter, their highest quarterly total on record, according to the firm's Dividend Monitor report. Those payments rose 2.5% from the same quarter a year earlier, extending dividend growth during 2026.
Banks had paid record dividends of £11.1 billion in the second quarter of 2026, according to Computershare, with their strong payouts preceding the October report. Banking sector dividends rose 20.6% year on year, outpacing growth in total UK company dividends during the same quarter. Across sectors, 11 of the 20 covered by the second-quarter report recorded underlying dividend growth. Computershare calculates this growth by excluding one-off special dividends from the total, according to the Dividend Monitor's methodology. The calculations also adjust for exchange-rate movements, meaning the underlying growth measure differs from the change in total cash payments to shareholders.
At the start of 2026, total UK company dividends reached £16.4 billion in the first quarter, according to Computershare's report for that period. The total rose 21.1% year on year, a faster pace of growth than the subsequent increase in total second-quarter payments. Regular dividends amounted to £13.2 billion in the first quarter, compared with total payments that also include special dividends. Regular payments grew 1.1% at constant exchange rates, according to the firm, a much slower increase than growth in the total over the same period. The jump in total dividends at the start of the year thus coincided with a modest increase in regular payments, with the two measures using different bases for calculating growth.
This growth followed a decline in UK company payments during the third quarter of 2025, when total dividends stood at £24.6 billion, according to Computershare. Those payments fell 1.4% from the same period a year earlier, before the annual rate of change turned positive in the final quarter. In the fourth quarter of 2025, companies paid total dividends of £14.3 billion, according to the firm's year-end report. Those payments represented a 1.3% year-on-year increase, an improvement from the decline recorded in the third quarter. Dividends thus ended the year with a quarterly year-on-year increase, ahead of the larger rise in total payments during the first quarter of 2026.
For 2025 as a whole, total UK company dividends fell 0.9%, according to Computershare, despite the improvement in payments recorded in the final quarter. Cash dividends to shareholders amounted to £87.5 billion during the year, according to the firm's tally, which measures total annual payments here. Alongside dividends, UK share buybacks reached a provisional £63.6 billion during 2025, according to the same source. The value of buybacks was below total cash dividends paid during the year, with the buyback estimate remaining provisional in the firm's report. Those buybacks took place in a year when total dividends declined, before payments returned to year-on-year growth in the first and second quarters of 2026.
For 2026 as a whole, Computershare had revised its forecasts in the second-quarter report, raising its underlying growth estimate and lowering its estimate for total payments. The firm raised its annual underlying growth forecast to 3.4%, on the measure that excludes special dividends and adjusts results for exchange-rate movements. Meanwhile, it lowered its forecast for total UK dividends during the year to £90.5 billion, according to the estimate issued in that report. The projected annual total in the second-quarter report remained above actual payments of £87.5 billion during 2025. These estimates for 2026 date from the second-quarter report, when the firm combined an expectation of stronger underlying growth with a reduction in the total amount expected to be distributed to shareholders.