UK firms 'cut dividends by £10bn'

From the BBC:

Shareholders in UK companies saw their dividend payments cut by £10bn last year, according to a report.

UK companies paid out £56.9bn to investors in 2009, 15% less than in 2008, said Capita Registrars.

Investors in the banking sector were the worst hit, said the report, after the industry cut payouts by £6bn from 2008 level.

It predicted dividends would grow this year but only by 5%, because of a sluggish economic recovery.

Dividends underpin the valuation of shares by stock market investors and are crucial to the financial well-being of millions of people through the investments held by their pension funds.

Pension schemes typically invest in a wide range of assets, some of which are bought primarily in anticipation of their value going up - "capital growth" in the stock market's jargon.

But dividends are vital to generate the cash flow necessary to pay pensions in payment and in the future.

Full article:
http://news.bbc.co.uk/1/hi/business/8503014.stm

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