UK dividends reached record heights in the third quarter, hitting £27.2bn, but this is unlikely to prevent an annual slump in payouts.
Figures from Capita Asset Services' dividend monitor forecasts that payments for 2015 will come in at £87.2bn, down 10.5 per cent from £97.4bn in last year.
A series of special dividends form the likes of Lloyds Banking Group have propped the year up, according to Capita.
“If it weren’t for the big special payment from Direct Line, and the fact Lloyds Bank’s £600m interim equalled its final dividend, we would have cut our forecast more for 2015,” the monitor said.
Lloyds Banking Group resumed paying a dividend this year, for the first time since it was bailed out to the tune of £20.5bn in 2008.
David Buik, market commentator at Panmour Gordon told City A.M.: “There’s no doubt dividends have continued to fall. We’ve seen a rise in special dividends as a result of low inflation, and companies being unable to sustain growth,” he added.
Special dividends continue to contribute more to total payments, up 25.9 per cent year on year in the third quarter at £1.4bn, with insurer Direct Line and house builder Taylor Wimpey adding significantly to the tally.
Taylor Wimpey’s £278m special payment to shareholders was larger than all the dividends the company has paid since 2009.
Forecasts for next year are almost as bleak, with Capita’s preliminary 2016 forecast for payments standing at £89.8bn, an increase of just 3 per cent year on year.
The negative outlook follows a warning last month that profits at the UK’s 350 largest listed companies are at their lowest in relation to dividend payouts in almost six years.
Commodity price drops, slowing global growth and supermarket price wars were to blame, according to retail stockbroker The Share Centre.
Justin Cooper, chief executive of Shareholder solutions, part of Capita Asset Services, said: “Profits are lower relative to dividends than at any time since 2009, and we have seen some of Britain’s biggest dividend payers announce drastic cuts for the year to come, with the prospect of more to follow.”