Dividend payments in the UK have decreased by 14%, and investors have received £1 billion less than they did the previous year

During the third quarter of 2025, investors received a total of £246 billion in dividends from UK companies, which was 124 percent less than the same period the previous year

Due to firm cuts, investors in UK companies received dividend payments of £1 billion less in the third quarter of 2025 than they did a year earlier.

The most recent dividend monitor report from Computershares shows that UK companies paid out a total of 24.6 billion to their investors in Q3 2025, a 1.4 percent decrease from the 25.6 billion paid out in the same period the previous year.

The smaller payouts are due to a decline in special dividends. Five of the leading companies in the UK reduced their special dividends, which significantly slowed dividend growth by 5 to 7 percentage points.

Regular dividends (excluding special payments) fell 0.6 percent in Q3, which was marginally better than the 0.9 percent decline predicted, despite the fact that dividend payouts have been under pressure for a while.

The sectors that produced the most and the least are examined.

The industries with the lowest dividend payments.

The decline in total payments was specifically caused by the mining industry; Rio Tinto, Glencore, and Anglo American cut dividends by 711 million in Q3, or 2 percentage points less than the growth in Q3.

Berkeley decided to use the money for share buybacks, Burberry halted payments, and Vodafone cut its dividend in half.

This last justification plays a big role in Q3s' slowed dividend growth. Computershare found around 160 companies currently have active share buyback programmes, with some being sizable. The two biggest dividend payers in the UK, Shell and HSBC, repurchased about 6% of their stock in the previous year.

Shell spent around twice as much on share buybacks than it did on dividends in the last 12 months, according to Computershare before the pandemic the opposite was true by a wide margin.

However, in 17 of the 21 industries that Computershare examined, dividends appear to still be popular, and 80 percent of UK businesses increased or kept their payouts.

Although the median dividend growth per share for the entire market was a modest 3 percent, some companies stood out during the quarter.

Computershare highlighted Rolls-Royce, which increased Q3 payouts by 1 point 5 percentage points and contributed the most positively to overall dividend growth for the second consecutive quarter. It's no surprise that it was among the most popular stocks purchased by individual users in September.

Following robust earnings growth, NatWest increased its dividend by more than half, making it a notable example in the banking industry. Lloyds saw a significant increase as well.

Next quarter, will UK dividends increase for investors?

Investors may have to prepare for yet another disappointing quarter after Q3's weak dividend growth, as Computershare reports that its outlook for Q4 has gotten worse.

Three months ago, Computershares projected underlying dividend growth of 2point 8 percent for the entire year 2025. This is 30 basis points lower than the current projection of 2point 5 percent.

This is thanks to a greater drag from share buybacks, slower median dividends growth, and new cuts in the pipeline. In 2025, 84 points 7 billion would be the total regular dividend yield if the projection is accurate.

What is more, as one-off special dividends have been unusually rare this year, Computershare has lowered their Q4 forecast for them.

This implies that the company only anticipates paying out 2 point 5 billion in special dividends in 2025, which is 2 point 7 billion less than the 5 point 2 billion it paid out in 2024.

"We are seeing some additional cuts for Q4, and there is little chance of higher payouts from global multinationals like those in the oil sector," stated Mark Cleland, chief executive of issuer services at Computershare.

The combination of sticky inflation, high market interest rates, and widely reported declines in consumer and business confidence creates a difficult economic environment for businesses with a domestic focus.

A major factor slowing dividend growth is also the fact that companies are spending a lot of money on share buybacks. Currently, 160 companies have active programs, some of which are very large.

All of this points to an anticipated anomalous second consecutive year of dividend declines in 2025, which would leave payouts far below their pre-pandemic levels.

Top dividend stocks to keep an eye on.

Some stocks continue to provide consistently high payouts for UK investors in the face of a waning dividend climate.

Chris Beauchamp, IG's chief market analyst, recommended three dividend stocks for investors to keep an eye on.

HSBC.

On July 18, HSBC declared that it would distribute dividends of 7p356 per share.

"With consistent dividend increases over the last five years, HSBC has regained its standing as a reliable income stock," Beauchamp stated. Stable earnings from Asia and the UK support the payouts, which are well-covered due to strong profits and capital discipline. Without taking on undue risk, investors receive a steady and reliable income stream.

Aviva.

Beauchamp is also monitoring the dividend stock of Avia, an insurance company. On January 9, the company declared that it would pay dividends of 13 per share.

He declared: "Aviva's steady dividend growth has been fueled by its efficient operations and robust cash generation. In comparison to its FTSE 350 peers, the insurers' payouts are stable and supported by substantial capital reserves, making them a reliable and sustainable source of income.

"Sainsbury's"

Beauchamps' last dividend stock to keep an eye on is the massive supermarket chain Sainsbury's. This is a result of its "consistent dividend growth, bolstered by robust trading and robust cash flow."

He continues, saying: "Its payout is well-covered and supported by efficiency improvements and strong grocery demand, offering steady income with room to grow."

Sainsbury's announced on April 17 that it would pay dividends of 9p7 per share.