Managers say dividends improving despite negative forecasts

UK equity income managers say companies are beginning to pay dividends again, despite research forecasting a decline in UK dividends of 6.5% this year.

The Capita Registrars Dividend Monitor warns UK dividends will fall again in 2010 as the BP disaster "puts a large dent" in firms' ability to distribute cash to their shareholders. This year, Capita expects UK dividends to total £54.7bn, down 6.5% from 2009, and 19% less than at the peak of payouts in 2008. In the first half, UK listed companies paid out £28.6bn, down 5.4% from £30.3bn last year. Paul Taylor, the head of dividends, says: "2010 is going o be another tough year for some income, with dividends set to fall again. The huge concentration of the UK market into a few big stoc...