UK companies handed out £14 billion in dividends during the first quarter of 2025, a drop of 4.6% compared to the same period last year. The dip stems largely from fewer one-off special payments and dividend cuts by big names such as Vodafone, Burberry, and Bellway Homes.
However, when you dig deeper, the picture looks a lot more positive. Underlying dividends, which strip out the special one-offs, totalled £13.6 billion. That’s just 0.2% lower year-on-year and better than many had predicted.
Sectors Showing Strong Performance
While the headline figure disappointed, certain sectors stood tall:
- Healthcare: Giants like AstraZeneca and GSK boosted payouts by 6.6% and 7.1% respectively, helping the sector deliver £3.2 billion in dividends.
- Industrials: Companies such as Ashtead Group showed strong resilience, keeping industrial sector dividends ticking over.
- Leisure and Travel: EasyJet’s return to profitability meant a sharp lift in payouts within the leisure sector.
Across the board, 82% of UK companies either maintained or increased their dividends during Q1. The median growth in dividends per share? A respectable 3.3%.
What’s Next for Dividends in 2025?
Looking forward, Computershare has nudged up its forecast for underlying dividend growth this year from 1.0% to 1.8%. They now expect regular dividends to hit £85.6 billion by the end of 2025.
However, the overall headline forecast has been pegged back. Strength in the pound has trimmed the sterling value of dividends paid in US dollars, keeping headline growth flat.
Mark Cleland, CEO of Issuer Services at Computershare, said: “Dividends are typically less likely than company profits to experience short-term fluctuations either during economic turbulence or in boom times, as most companies seek to deliver steady income growth over time for their investors.”
He also flagged a word of caution — while regular dividends look solid, special dividends may remain vulnerable to broader economic uncertainties.
The UK dividend scene in early 2025 paints a mixed picture. Yes, there’s been a fall in headline payouts. But underneath, core dividend growth looks reassuringly solid, especially in sectors like healthcare and industrials.
Investors would be wise to stay alert, weighing up the opportunities steady dividends present, while keeping an eye on the fragile broader economic backdrop.
