UK companies paid a record £35.3bn in dividends in the second quarter of 2026, according to Computershare's latest Dividend Monitor. Underlying growth, which strips out one-off special dividends and currency movements, came in at 7.4% year-on-year, well ahead of the 2.5% rise in the headline figure.
The gap between the two numbers is due to a sharp fall in special dividends, the one-off payments companies make outside their regular schedule. These dropped 76% year-on-year to £465m, cutting around five percentage points off headline growth. At a company level, median dividend growth was just 2.8%, unchanged from the first quarter.
That gap between a strong aggregate figure and a modest median points to growth concentrated in a small number of large payers rather than a broad-based increase. Mark Cleland, Computershare CEO of issuer services for the UK, Channel Islands, Ireland and Africa, said there are "pockets of earnings strength" in energy, defence, banking and parts of the mining sector.
"But the weak link is the domestic economy, which is affecting, for example, consumer-facing industries and housebuilders," he said.
"The outlook remains positive overall, but dividend growth is likely to moderate in the second half of the year as more sectors currently showing slower growth dominate the mix, and as one or two significant cuts already announced take effect."
Banks distributed a record £11.1bn, up 20.6% year-on-year, and contributed around four-fifths of the quarter's aggregate dividend growth. HSBC raised its dividend 25%, partly funded by suspending its buyback programme, while NatWest and Standard Chartered increased payouts 53% and 75% respectively. Lloyds delivered a 14% rise. Persistent inflation has limited the Bank of England's scope to cut interest rates, sustaining the high net interest margins and near-record profitability behind the banking sector's payouts.
Mining dividends rose 27.5%, adding £917m year-on-year, as Antofagasta, Fresnillo and Endeavour benefited from higher copper, silver and gold prices. Rio Tinto increased its final payout 13% despite lower profits from falling iron ore prices, keeping its payout ratio at 60%, the top of its target range.
Food, drink and tobacco dividends fell 15.9%, driven by Diageo halving its payout as spirits demand softens and distributors work through excess stock. The industrials sector fell 7.9%, with margin pressure at Mondi and a downturn in recruitment at Robert Walters outweighing a stronger contribution from BAE Systems. Just 11 of 20 sectors saw underlying dividend growth in the quarter.
Looking at market cap, the UK's top 100 companies, where banks and miners are more heavily weighted, grew dividends 7.7% on an underlying basis, against 4.6% for the mid-cap 250. UK equities are forecast to yield 3.2% over the next 12 months, against a 10-year gilt yield of 4.8% and instant access savings rates of 4.2%, according to the report.
Computershare has raised its forecast for 2026 underlying dividend growth to 3.4%, from 3.1%, implying regular dividends of £86.5bn for the year. Its headline forecast has been cut to £90.5bn from £91.6bn, reflecting the weaker-than-expected special dividend total and a slightly stronger pound, which reduces the sterling value of dividends declared in dollars and euros. That would still mark headline growth of 4.3% for the year, down from the 5.3% forecast in the previous edition.