Dividend hike expected for FTSE 350 firms

DIVIDENDS from FTSE 350 firms are projected to climb by £74.5bn this year, up 4.7 per cent, with an even larger increase expected for the year afterwards.

A new forecast by Markit suggests that after a significant rise this year, dividends among the UK’s large listed firms will surge by nine per cent in the next financial year.

Oil and gas, healthcare and banking make up the three largest portions of this year’s expected payouts, making up £12.6bn, £10.4bn and £10bn respectively.

Despite the strength of the sector generally, Markit argues that recent US legal action against Barclays may “cast a shadow” over the group’s dividend this year.

Special dividends are also expected to make up a significant portion of this year’s total, with the one-off premiums raising the total to £81.82bn this year.

House builders are also expected to be among the sectors paying out more, given the rapid increase in property prices in the last year. Similarly, estate agents have benefitted from the market’s recovery, and Markit suggest that Foxtons will more than triple their dividend.