- The UK’s performance so far in 2024 has also far outperformed the rest of Europe.
British savers and pensioners have received a boost to their savings after the value of dividends paid rose in the first three months of the year.
London-listed companies handed out £12bn to investors between January and March.
This is a seven percent increase from the first quarter of 2023 and was the highest amount since 2021.
On the rise: the value of dividends paid increased in the first three months of the year
At the time, companies were rushing to deliver cash to shareholders after cutting dividends during the height of the pandemic.
The UK’s performance so far in 2024 has also far outperformed the rest of Europe, where dividends fell by a fifth to £39bn.
Even excluding one-off payments and seasonal factors, as fewer continental companies arrange payments earlier in the year, the UK continues to outperform the rest of Europe.
The rise will be a boost to London’s reputation as it underlines that ordinary Britons can still earn a regular income from the stock market.
The London Stock Exchange has been hit in recent years by a lack of public listings, as well as the exodus of some London-listed companies abroad.
The overall total in the UK was helped by extraordinary payments, including a special dividend from Associated British Foods, owner of Primark, following strong trading.
The biggest increase came from catering business Compass, which continues to recover after the Covid pandemic.
The figures come as Britain is recovering from recession, with the highest GDP growth – along with Canada – of the entire G7 group of advanced economies in the first quarter.
Meanwhile, Europe has been struggling, held back by problems for manufacturers in Germany, its largest economy.
However, London’s payments were still surpassed by those on Wall Street.
Dividends across the pond rose 7.5 percent compared to a year ago, a statistic that will do little to diminish the dazzling appeal of the New York market for investors.
Globally, it was a record quarter for first quarter dividends, reaching £267 billion, according to Janus Henderson analysis.
The asset manager’s study found that almost half of that figure was represented by the United States, where it amounted to £129 billion.
The first dividend from social media giant Meta, the company behind WhatsApp, Instagram and Facebook, contributed to this.
Jane Shoemake, client portfolio manager in Janus Henderson’s global equities team, said: “Investors have enjoyed a strong start to 2024, with stocks rising globally and dividend growth continuing to show the strong underlying momentum achieved towards the end of 2023.”
Andrew Jones, portfolio manager at Janus Henderson in the UK, said that despite outperforming Europe, dividend growth in the UK had been “relatively vulgar” in the first quarter.
But he added: “We expect the situation to improve during the second half of the year as cost pressures ease, interest rates reduce and the economy begins to recover, driven by real wage growth and a more buoyant consumer. “.
