More than one in four of the highest-yielding UK shares cuts its dividend within a year

Corrected 9 October 2026. The first version of this note said 30.3% of the highest-yielding UK quarter cut within a year. That was too high. It summed raw dividend amounts, so a share split, consolidation or rights issue could read as a cut. It also rebuilt each company's payments from histories that stopped when the company fell below the size cut-off, which made later payments go missing and read as cuts too. On split-adjusted amounts and the full payment record, the figure is 26.1%. Every number below is the corrected one. How we found it.

Among UK-listed shares observed every six months from 2015 to 2024, those in the highest-yielding quarter of the market cut their dividend within the following 12 months 26.1% of the time. The lowest-yielding quarter cut 11.1% of the time. The gradient rises across all four quartiles: 11.1%, 18.2%, 21.6%, 26.1%.

Put plainly: more than one in four of the highest-yielding UK large caps cut within a year, against about one in nine of the lowest-yielding.

The US pattern is similar at the top (22.6% for the highest-yield quartile), and the UK cuts more often in every quartile.

All figures exclude special dividends and exclude the observation dates whose forward windows span the 2020 pandemic suspensions.

The data

Cut within 12 months, by yield quartile. Specials excluded, pandemic excluded.

Pooled across both markets, each banded separately (n=19,356): 9.9%, 9.1%, 12.2%, 23.0%.

The US series is not monotonic. Q1 (9.8%) sits above Q2 (7.9%). The lowest yielders include companies that have only just started paying a dividend, where an early reduction is more common. The UK series rises across all four.

The UK gap between the top and bottom quartiles is 15.1 percentage points. Allowing for chance, we are 90% confident it lies between 11.3 and 18.8 points. That interval comes from the same measurement run as a pre-registered test, strategy test 1.

Robustness: the specials threshold

Special-dividend detection is a heuristic (see Method), so the finding is reported across five settings. The UK gradient holds at every one, and the top quartile is stable:

UK Q4 moves within 26.1% to 28.9% across every setting, and US Q4 within 22.6% to 25.0%. The result does not depend on the threshold chosen.

Method

• Cut definition. Rolling TTM: a cut is recorded where the forward 12-month dividend total falls more than 2% below the trailing 12-month total.

  is_cut = d_fwd < d_base * (1 - 0.02)
  

  Summing a full year each side removes payment cadence from the question. UK issuers typically pay a small interim and a larger final, so a payment-to-payment comparison fires on nearly every UK name every year for structural reasons. A genuine reduction (25p in April, 10p in November) still registers, because the annual totals differ.

• Both windows come from each company's full payment record, dated by payment date and in split-adjusted amounts, and they include payments after a company left the dataset's size screen. This is the dataset's own cut label (cutWithin.m12, frozen dataset v4). The analysis script recomputes it from the payment record at each specials threshold, and at the headline threshold it matches the frozen label on all 19,356 rows.

• Special-dividend detection. The record carries no is_special flag. The naive rule (payment > N x median) is wrong for the UK, where a final of roughly twice the interim is the normal pattern. A payment is flagged special only when both hold:

  1. it exceeds 2.5x the median payment of the preceding 24 months (requiring at least 3 prior payments), and
  2. it has no comparable counterpart about a year earlier: no payment within 45 days of (date minus 365) worth at least 60% of it.

  Condition 2 is what protects UK finals. A recurring large final has a counterpart in the prior year; a one-off special does not. 1,553 payments are flagged at the headline setting.

• Quartiling is on the as-reported trailing yield, assigned within each market and each observation date, with at least 20 companies a date. Banding within a date stops market-wide yield drift deciding which period lands in which quartile. As-reported yield is what an investor sees on a screener.

• Truncation. Observations after 2024-07-15 are dropped, because their forward window runs past the end of the data.

Limitations

1. Acquisitions are conflated with cuts. An acquired company stops paying, which reads as a cut. This inflates all rates by an unknown amount. It should affect quartiles similarly, so the relationship is more robust than the levels.
2. Special detection is heuristic, not sourced from a corporate-actions feed. The sensitivity table above is the mitigation, not a substitute.
3. Split-adjusted amounts absorb some genuine resets. Adjusting for share-count changes is right for comparing a dividend per share over time, but it also smooths a dividend that was rebased after a rights issue or demerger. Those are cuts in the plain sense and may be undercounted here.
4. The as-reported yield is itself wrong for some companies that split or consolidated their shares, so a few rows can sit in the wrong quartile. A screen ranked on a cross-checked yield (strategy test 2) finds the same pattern at the top.
5. Survivorship is only partly corrected, bounded by delisted price coverage.
6. $2bn market cap floor. Nothing here applies to small caps, and the floor approximates, but is not, FTSE index membership.
7. A 2% tolerance is tight for progressive policies with small annual variation.
8. UK sample is 2,247 observations, an order of magnitude smaller than the US.

What this does not show

It does not show that high yield causes cuts, and it does not support a claim about any individual share. It is a base rate across a decade. It also says nothing about total return: a company that cuts may still outperform.

Reproduce it

cd dividendmapper && npx tsx scripts/research/ttm-cut-by-yield-quartile-label.ts

It prints the main table, the pooled rates and the threshold table, and fails if its recomputed label disagrees with the frozen one on any row.

Correction

The first version of this note (9 August 2026) reported 30.3% for the UK top quartile and 13.0% for the bottom. It rebuilt cuts from the dividend histories stored with each observation, summing raw amounts by ex-dividend date.

On 9 October 2026 we traced the gap between that method and the dataset's cut label. Run on the label's payment record, the old method's rule agrees with the label on every row. The whole gap came from the record it was fed. At the top quartile the gap is 4.2 points:

• Raw amounts, about 3.2 points. A split, consolidation or rights issue changes the dividend per share without the company paying shareholders less, and raw amounts read that as a cut.
• Incomplete histories, about 0.8 points. A company that fell below the $2bn screen had no later observation, so its later payments were missing and read as a cut.
• A slightly different set of rows, about 0.2 points. This version bands the same universe as strategy test 1.
• Dating by ex-dividend date rather than payment date moved individual rows, but the moves cancelled out at the quartile level.

The UK cut rate still rises from the lowest-yield quartile to the highest, at every specials setting. The top-quartile rate was overstated by 4.2 points.