The regular dividends that investors receive from owning shares in UK-listed companies soared by 16.5% in 2022, far outstripping wage growth in either the private or public sector.
Including the value of one-off dividends, which companies make from time to time to reward investors above and beyond their regular annual payouts, the total value was still up, albeit by a more modest 8% to £94.3bn.
Investors’ returns from underlying dividends – excluding volatile one-off payouts – reached £84.8bn during the year, partly owing to a £3.8bn boost from the weakness of the pound, which inflated the figures for dividends paid in dollars.
The rise in share income was particularly steep for those who invest in banks and oil companies, which were boosted by the high oil and gas prices that have contributed to the cost of living crisis.
Link Group said “resurgent” banking dividends were the most significant driver, accounting for a quarter of the rise. Soaring energy prices, which have saddled households with sky-high bills, pushed oil payouts higher by a fifth. Oil companies also implemented share buybacks, which can strengthen the share price as another way of rewarding investors, with Shell alone repurchasing £16bn of its own stock.
Living costs are rising faster than salaries, although not faster than dividends.