Research suggests share dividends to drop in 2023


Recent statistics show that last year UK firms paid out share dividends worth up to £94.3 billion, rising from £87.3 billion in 2021, but predict a gloomier outcome for 2023. UK shareholders seeking an income from dividends often look to experts in portfolio management in Chester, Liverpool and other major cities. Wealth managers can help consumers create a diverse portfolio, designed to weather volatile economic markets while receiving a return.

The report states that total dividends, including both one-off distributions and regular payments, increased by 8% year-on-year, while underlying pay outs and stripping out special dividends were up by 16.5%, reaching £84.8 billion. However, these positive trends are not expected to continue through 2023.

Save for consumer basics and domestic utilities, dividend pay outs grew in nearly every industrial sector throughout 2022. The British pound’s weakness for much of last year provided an extra boost to payments declared in dollars, which were later converted to sterling at agreeable exchange rates. Resurgent banking dividends represented the year’s key driver and accounted for a quarter of the rise in underlying pay outs.

However, experts predict that dividends will increase more slowly in 2023 as higher rates of interest on debt take their pound of flesh from corporate profits. Headline pay outs are estimated to fall by 2.8%, which will amount to £91.7 billion for a year-end figure. Including regular dividend pay outs and one-off payments, estimates suggest the UK listed companies will yield approximately 3.7% over the course of this year.

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