UK dividends hit a record high of £35.3bn in the second quarter of 2026, according to the latest figures from Computershare’s Dividend Monitor.
This marked a headline rise of 2.5% in quarterly dividends, with regular dividends (not including specials and exchange-rate moves) up 7.4%.
Mark Cleland, CEO, Issuer Services United Kingdom, Channel Islands, Ireland and Africa at Computershare, said: “The aggregate figures for Q2 were positive, but dividend growth remains heavily dependent on a small number of large companies and sectors.”
Indeed, the top five companies (HSBC, Rio Tinto, NatWest, Unilever and Shell) accounted for 41% of the total dividend payout in Q2 this year.
Banking dividends rose by 21%, representing roughly four-fifths of all dividend growth during the quarter, supported by strong profitability and high interest rates. This represented a rise of roughly £11.1bn, according to the report.
Mining dividends bounced by 27.5%, as higher prices for precious metals and copper helped the sector recover from a cyclical low. “Despite slightly lower profits driven by falling iron ore prices, strong cashflow and a robust balance sheet enabled the sector’s giant, Rio Tinto, to increase its final payout for the year by 13%,” the report noted.
This dominance of banking and mining businesses means the FTSE 100 far outpaced its mid-cap counterpart in dividend growth (7.6% compared with 4.6% this quarter) “Overall, top 100 companies account for around nine tenths of UK dividends, so they anchor the quarterly growth rate,” the report noted.
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Healthcare and general financials were also both up by 6.1%, supported by GSK and London Stock Exchange Group respectively.
However, these positive stats obscure some discrepancies, with only 11 of 20 sectors increasing dividend payouts according to the report.
The weakest of the batch was the food, drink and tobacco sector where dividends slid 15.9%. The report attributed this primarily to Guinness owner Diageo, which halved its dividend in response to continued earnings pressure. This put the sector total at £2.1bn in the second quarter of 2026, compared with £2.5bn in Q2 2025.
Cleland added: “We are seeing pockets of earnings strength – recently 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.”
Special dividends also declined in the second quarter, falling 76% ahead of Computershare’s 40% prediction. On average, 49 special dividends were paid annually between 2015 and 2019, but this has dropped to just 30 in the last five years according to the report.
This may be the result of a rise in share buybacks, which boards may prefer as a way of distributing excess capital because they offer greater flexibility, Computershare said.
Looking ahead to the rest of the year, Cleland was mostly positive but warned investors to temper their expectations.
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.”
With the market struggling for strong earnings momentum and dividend cover levels low on an international standard, rising profits are the only way to sustain dividend growth, the report argued.
“Nevertheless, the strength of the second quarter has prompted us to increase our forecast for underlying dividend growth this year to 3.4%, from 3.1%, implying regular dividends of £86.5bn.”
Meanwhile, they’ve slashed their forecast for headline dividends (including specials) to £90.5bn from £91.6bn, representing headline growth of 4.3% year-on-year (down from 5.3%).
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