Dividends will make a comeback

It's been a miserable year for income investors. But recent months have brought signs that dividends will return to normal.

This year has been a miserable one for income seekers, says Russ Mould of AJ Bell. FTSE 100 firms have collectively “cut, deferred or cancelled” more than £37bn in dividends this year. Yet recent months have brought signs of a return to normal. Sixteen firms have reinstated payouts amounting to £2.7bn for this year or next.

Expect total FTSE 100 payouts to rise from £59.9bn this year to £70.8bn in 2021. The UK market remains reliant on a few dividend stalwarts: 54% of 2020 dividends will come from just ten firms, including BP, Rio Tinto and GlaxoSmithKline. Overall, the FTSE 100 yields 3.2% for 2020 and 3.8% for 2021.

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.