UK companies paid out £92.1bn in dividends in 2024, 2.3% higher on a headline basis than in 2023.
However, these dividends were boosted by higher special dividends, but the underlying total, which excludes these one-off payments, fell 0.4% on a constant-currency basis to £86.5bn.
This is according to the latest Dividend Monitor report from global financial services company Computershare.
Mining companies, which were the largest dividend paying sector between 2021 and 2023, saw a £4.5bn decline in 2024.
The only other sector outside mining to see a significant reduction was housebuilding, which has suffered from the slow housing market. Banks, insurance companies and food retailers were among the sectors to make the strongest positive contributions.
Overall, 17 out of 21 sectors and 77% of companies saw dividends rise or hold steady year on year.
In the fourth quarter, headline dividends fell 0.5%.
The report also outlines predictions for 2025: that median dividend growth per share of 4-4.5% will continue from last year; and that exchange rates are currently on track to boost headline dividend growth in 2025.
Payouts in 2025 are set to reach £92.7bn at the headline level up 0.7% year on year, with the underlying total (which excludes special dividends) set to rise to £88.2bn up 1.0% on a constant-currency basis.
Computershare CEO issuer services Mark Cleland said: “It is worth highlighting that dividend growth was better outside the highly cyclical mining sector. In addition, share buybacks are having an impact, diverting an estimated £42-45bn of cash in 2024 to shareholders that might previously have been paid mostly in dividends.
“Even so, the report’s predicted 4-4.5% typical company dividend growth for 2025 is modest in the context of UK inflation at 2.5% and will be impacted again by some notable cuts in the year ahead.
“The report indicates that sharply rising borrowing costs will affect government finances, economic growth, business investment, profit margins and consumer spending. These higher market interest rates will likely have an impact on the ability of companies to generate cash for shareholders.”
In July last year, Computershare revealed UK dividends hit a new record high during Q2 2024.
Computershare said banks made the largest positive impact on dividends, distributing £1.1bn more in regular dividends compared to Q2 last year, as high interest rates continued to support profit margins. This put banks on track to make record payouts in 2024.
