Our Chief Investment Office and experts share insights into our house view and macro trends.
Dividends offered by the UK’s biggest companies are reaching new highs compared to their earnings. Dividend payout ratio for the FTSE 100 has just passed 70%, meaning over the last year, dividends have been worth more than 70% of those companies’ earnings. The fact that many of these companies are troubled shows that companies are under pressure to keep dividends up, even when revenues are trailing off. So just how secure are dividends?
The recent Budget delivered a body blow for business owners in the form of dividend taxation. From the start of the new tax year, the dividend tax credit was replaced by a new dividend allowance in the form of a 0% tax rate on the first £5000 of dividend income per year. When these changes were first announced in the summer 2015 Budget you could hear the groans from small business directors the land over.
If you thought the Natural History Museum was focused on our planet’s past, prepare for an eye-opening insight into the valuable work they undertake to help protect and sustain life on earth.
As widely predicted, the Bank of England (BoE) reduced the interest rate to 0.25%, after seven years at 0.5%. Although expected, the cut was accompanied by an aggressive reflation package which was aimed at heading off – or at least mitigating – a UK recession later in the year.
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IMPORTANT: Investment involves risk. The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested. Past performance is not a reliable indicator of future performance.