Is the Worst Over for UK Dividends?

Investors should brace themselves for £40 billion in lost dividends this year, and while 2021 should see a recovery, it will take years to get back to 2019 levels

James Gard 20 July, 2020 | 9:14AM

Scissors cutting ribbon

UK income investors should not expect a return to last year's dividend levels until 2026, according to Link's quarterly dividend report, which lays bare the extent of the damage from cuts and suspensions. Before Covid-19, UK companies were expected to pay out over £100 billion in income, but this has been drastically chopped to £60 billion even under a best-case scenario.

2020 has already been a tough year for UK dividend seekers, with high-profile cuts from the likes of Royal Dutch Shell (RDSB) and tobacco giant Imperial Brands (IMP). The cuts have slashed billions of pounds in payouts that investors had being relying on for vital income. 

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James Gard  is content editor for Morningstar.co.uk

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