UK Dividend Payments Rise 14% in Q3 2026, Driven by Mining and Banking Sectors

UK third-quarter dividend payments increased by 14.1% year-on-year on a headline basis to £28.4 billion, according to Computershare's UK Dividend Monitor. The total reached a seven-year high for the third quarter, the highest since 2019. Large payouts from banks and mining companies drove the increase. Mining companies and banks accounted for 85% of dividend growth in the quarter.

Mining companies increased payouts by 89.6% year-on-year in the third quarter, driven by rising commodity prices, particularly for copper and precious metals. However, weak payments in the third quarter last year made the headline increase look stronger. Rio Tinto raised its dividend by 44% to £2 billion, the largest payout in the quarter. Glencore and Anglo American each more than tripled dividend payouts. Antofagasta and Fresnillo also posted large increases.

Bank dividends rose by 24.5% year-on-year. Barclays almost doubled its interim dividend. Standard Chartered increased its payout by 66%. Lloyds and NatWest increased dividend payouts by 25% to 30%.

Dividend Monitor author Mark Baker said global data centre construction clearly benefits companies extracting metals. Baker said banks benefit from interest rates remaining higher for longer and an elevated savings ratio that provides cheap funding. Baker noted that the median dividend increase across all sectors was 5%, above recent norms. Baker said dividend payouts were finally gaining momentum after the post-Covid rebound in 2021 and 2022 faded in subsequent years.

Advertising agency WPP cut its dividend by 69% amid weak trading and a major restructuring. Packaging group Mondi cut its payout by 60% because of rising costs and falling earnings. The UK's retail sector was another area of weakness. Pets at Home cut its final dividend by 67.5% amid falling profits. Discounter B&M European Value Retail cut its distribution by 37%. Stationer WHSmith eliminated its payout entirely.

Rising share prices reduced the dividend yield from 3.2% a year ago to 3.1%. The dividend yield now trails the 10-year gilt yield of 5.4% by the largest margin since 2007, before the global financial crisis. Baker described a dividend yield below the fixed-income yield as a more normal relationship. Baker said equity yields theoretically grow over time and that the lower dividend yield reflects a premium for growth.

Computershare forecasts that UK-wide dividend payments will rise 7.3% to £92.8 billion during 2026 as a whole. However, that total would remain comfortably below the £100.5 billion peak in 2019. The forecast total would represent a 31% decline from that peak in inflation-adjusted terms.