Investments trimmed

Dividends fall by half as lockdown bites into income

Squeezed balance sheets have forced firms to conserve cash

Companies cut dividend payouts to shareholders by almost £22bn in the three months to the end of June, a drop of 57.2%, according to Link UK’s dividend monitor. Excluding special dividends, payouts fell 50.2% to £16bn.

It was the second-lowest second quarter since 2010 and the decline was the biggest on record.

Cuts were prompted by companies seeking to conserve cash with demand plunging and the UK entering a deep recession.

The survey showed 176 companies cancelled dividends and 30 cut them, representing three-quarters of payers.

The Bank of England told all banks to cancel 2020 dividends and put pressure on insurers to do the same.

FTSE 250 payouts dropped 76% compared to a 45% fall for companies in the FTSE 100 index.

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