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Dividends still on pause

It will take time for the economy to get back to full strength. Brexit is now swinging back into view, bringing with it further challenges. Against a backdrop of recession, earnings at continued risk and balance sheets in need of repairs, it seems realistic to expect that the spate of cuts to dividends will not be restricted to a few short weeks of 2020.

So far around half of the FTSE 100 have cancelled or cut dividends. Even Royal Dutch Shell, the world’s biggest dividend payer in five out of the past seven years, has slashed its dividend. And although BP didn't, it may now need to revisit that decision as Alex Hamer explains on page 8. According to AJ Bell, between 9 January and 12 June, 367 UK companies cut, delayed or suspended their dividends to the value of £31.7bn. That’s going to be hurting a lot of portfolios.

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