UK dividends fell 1.4% in Q3 to £24.6bn: few large cuts made disproportionate impact
UK-listed companies paid their shareholders £24.6bn during the third quarter of 2025 – down 1.4% year-on-year on a headline basis – according to the latest Dividend Monitor from Computershare.
The global financial services company said that unusually low one-off special dividends had affected the headline total, though the underlying picture was also weak. Regular dividends of £24.5bn (which exclude special payments) also fell, down 0.6% on a constant-currency basis, though this beat its forecast of a -0.9% drop.
A handful of companies making big cuts – knocking 5.7 percentage points off the Q3 growth rate between them – were responsible for the overall decline.
17 out of 21 sectors saw higher payouts year on year on an underlying basis, and eight companies in ten either increased dividends or held them steady year on year.
Mining
The mining sector saw payouts fall by a quarter as profits among the biggest companies came under further pressure.
Key dividend payers
Dividend cuts by Vodafone and Burberry also made a significant impact. For the second consecutive quarter Rolls-Royce made the largest positive contribution with its first interim payment since before the pandemic, adding 1.5 percentage points to Q3 growth.
Across the wider market, median per-share dividend growth was a relatively modest 3.0%, but there were pockets of real strength.
Banking
NatWest raised its dividend by more than half on the back of strong earnings growth, and Lloyds also made a large increase.
Q4 outlook
The report points out that the outlook for the fourth quarter has worsened with a greater drag from share buybacks, slower median dividend growth and some new cuts in the pipeline.
For example, Shell has spent almost twice as much on buybacks over the last year than on dividends – before 2022 the company’s dividends had always been larger.
The report now projects underlying, constant-currency growth of 2.5% for the full year of 2025 (down from 2.8% three months ago), yielding regular dividends of £84.7bn.
At the headline level, one-off special dividends are proving unusually rare this year.
As a result, the report has lowered Q4 projections for them, taking the annual total to £2.5bn, down (£2.7bn) from £5.2bn in 2024.
Along with the effect of the strong pound, the report anticipates total UK dividends falling to £87.2bn in 2025: down 2.3% on a headline basis (compared to a projected 1.4% decline three months ago).
The combination of surging UK share prices and a slightly lower report forecast means the prospective yield on UK equities for the next 12 months has dipped to 3.3%, down from 3.4% three months ago.
Mark Cleland, CEO Issuer Services United Kingdom, Channel Islands, Ireland and Africa at Computershare, said: “We are seeing some further cuts for Q4, and little prospect of higher payouts from global multinationals like those in the oil sector.
“The combined effect of widely reported falls in business and consumer confidence, sticky inflation and high market interest rates also make for a challenging economic backdrop for domestically-focused companies.
“In addition, companies are diverting a lot of cash to share buybacks, and this is a significant factor slowing dividend growth – around 160 companies now have active programmes, and some are very sizeable.
“All this adds up to a projected unusual second consecutive annual decline in dividends for 2025, leaving payouts a long way short of the pre-pandemic highs.”