UK companies have distributed their highest ever level of dividend payments in the second quarter of 2026, according to the Computershare UK Dividend Monitor. The total payout reached £35.3 billion, with regular dividends contributing £34.8 billion, marking a 7.4% increase.
The banking sector was a significant driver of this growth, paying a record £11.1 billion in dividends, a 20.6% rise compared to the previous year. This performance is attributed to strong balance sheets, persistently high interest rates, and low loan book losses, leading to near-record profitability. HSBC increased its end-of-year dividend by 25%, while NatWest and Standard Chartered raised payouts by 53% and 75% respectively, and Lloyds by 14%.
The mining sector also showed a strong recovery, with dividends 27.5% higher than last year's cyclical low. Increased prices for copper, silver, and gold boosted payouts from companies such as Antofagasta, Fresnillo, and Endeavour. Rio Tinto also increased its final payout by 13% due to strong cash flow and a robust balance sheet, despite slightly lower profits from falling iron ore prices.
Conversely, the food, drink, and tobacco sector experienced a 15.9% fall in payouts, largely due to Diageo halving its dividend amid weaker demand for spirits. The industrials sector also saw a 7.9% dip, with packaging and paper manufacturer Mondi and recruiter Robert Walters contributing to the decline.
While special dividends saw a 76% decline to £465 million, weighing on overall headline growth, the strength of Q2 payments has led to an increased forecast for dividend growth in the second half of the year, from 3.1% to 3.4%.