FTSE 100 dividend projections pared back as profit forecasts fall

Analysts have trimmed their projections for dividend across the FTSE 100 for 2025, with payouts set to grow by just 2% despite the UK equity index trading close to all-time highs.

Source: Sharecast

According to AJ Bell's second-quarter Dividend Dashboard released on Monday, £80.4bn in dividends are expected to be paid out by FTSE 100 companies in 2025, down from the £83bn forecast three months ago.

The amount, which represents a 2% increase on 2024, puts the FTSE 100 on a forward dividend yield of 3.5%.

Notably, none of the Footsie's constituents have declared special dividends for 2025 yet, compared with £3.7bn of special dividends offered collectively by HSBC, Fresnillo, Berkeley Group, Associated British Foods and Admiral in 2024.

Despite the relatively mild dividend growth, share buybacks have grown strongly so far this year, with £39bn in repurchases already announced by blue chips in the first quarter – more than half of 2024's record total of £58.3bn – though Next and Bunzl have called a temporary halt to their schemes.

“Adding together the forecast dividend total of £80.4 billion to the planned buybacks gives a total cash return of £119.4bn, some 5.25% of the FTSE 100’s total £2.3trn stock market valuation," said AJ Bell's investment director Russ Mould.

"That cash yield beats inflation, the 10-year gilt yield and the Bank of England base rate which, on balance, still seems set to go lower before it goes higher once more."

Nevertheless, Mould noted that profit forecasts for FTSE 100 constituents have started to "sag", falling 7% in pre-tax income terms over the past three months, while estimates for 2026 have been reduced by 6%.

“It is far from unusual for analysts to start in an optimistic fashion and then start to pare back their forecasts as a year develops. So far, 2025 fits that pattern and hopes for a new all-time high in pre-tax profits from the FTSE 100 are starting to dissipate," he said.

Compare our accounts

If you're looking to grow your money over the longer term (5+ years), we have a range of investment choices to help.

Bank of Scotland is not responsible for the content and accuracy of the Markets News articles. We may not share the views of the author. Understand the risks, please remember the value of your investment can go down as well as up and you may not get back the full amount you invest. We don't provide advice so if you are in any doubt about buying and selling shares or making your own investment decisions we recommend you seek advice from a suitably qualified Financial Advisor. Past performance is not a guide to future performance.

Important legal information

Bank of Scotland Share Dealing Service is operated by Halifax Share Dealing Limited. Halifax Share Dealing Limited. Registered in England and Wales No. 3195646. Registered Office: Trinity Road, Halifax, West Yorkshire HX1 2RG. Authorised and regulated by the Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN under number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.

Logo Allfunds

The information contained within this website is provided by Allfunds Digital, S.L.U. acting through its business division Digital Look Ltd unless otherwise stated. The information is not intended to be advice or a recommendation to buy, sell or hold any of the shares, companies or investment vehicles mentioned, nor is it information meant to be a research recommendation. This is a solution powered by Allfunds Digital, S.L.U. acting through its business division Digital Look Ltd incorporating their prices, data news, charts, fundamentals and investor tools on this site. Terms and conditions apply. Prices and trades are provided by Allfunds Digital, S.L.U. acting through its business division Digital Look Ltd and are delayed by at least 15 minutes.

FE fundinfo Logo

Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.

Refinitiv Logo

© 2025 Refinitiv, an LSEG business. All rights reserved.